WHAT COULD GO WRONG AND WHY YOU NEED

CYBER INSURANCE

What Cyber Insurance Covers

Cyber insurance typically covers the key costs and risks that come from a cyber incident. This includes:

  • Data breaches – costs to manage exposed or stolen customer or business data
  • IT recovery – restoring systems, recovering data, and fixing damage caused by hackers
  • Business interruption – loss of income while your systems are down
  • Cyber extortion – ransomware payments and support to respond to threats
  • Legal costs – defending claims if a third party is affected by the breach
  • Notification & support costs – informing impacted clients and providing credit monitoring if required
❋ Scenario 1 
Phishing Attack

A staff member receives an email that appears to be from a trusted supplier requesting updated bank details. Without realising it’s fraudulent, payment is made to the new account. Days later, the real supplier follows up - revealing the scam and a significant financial loss.

❋ What is covered by Cyber Insurance

Cyber insurance can help cover the financial loss from the fraudulent transaction, along with investigation costs to identify how the breach occurred. It also provides access to experts who assist in responding to the incident and preventing further damage.

❋ Scenario 2
Ransomware Attack

A business logs into their system and finds all files, client records, and emails locked. A message appears demanding payment in exchange for restoring access. With operations at a standstill, the business is unable to trade.

❋What Cyber Insurance covers

Cyber insurance can cover the costs of IT specialists to restore systems and recover data, loss of income during downtime, and in some cases, the ransom payment. It also includes expert support to manage the incident quickly and minimise disruption.

What’s Usually Not Covered by Cyber Insurance

  • Known or pre-existing issues that were not addressed before the policy started
  • Failure to maintain basic security standards (e.g. no antivirus, no updates, weak passwords)
  • Intentional or dishonest acts by the business owner or senior management
  • Contractual liabilities where you have agreed to terms beyond your normal legal responsibility
  • Loss of future profits beyond the defined interruption period
  • Reputational damage only (without a measurable financial loss)
  • Hardware wear and tear or non-cyber-related system failures
  • War, terrorism, or state-sponsored cyber attacks (varies by insurer)
  • Fines and penalties that are not legally insurable

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