Cyber liability insurance is a type of insurance that covers financial losses resulting from data breaches or cyber events.

What Is Cyber Liability Insurance?

Cyber liability insurance can apply to both first-party and third-party protections in the event of a digital attack or compromise. The first-party coverage includes business interruption, breach notification, credit monitoring and identity theft protection. Third-party coverage includes legal defense costs, regulatory fines, regulatory investigations and class action lawsuits.

The following are some examples of situations where cyber liability insurance may be needed:

A network intrusion resulting in financial losses due to theft of customer data (e.g., credit card information).

A breach exposing customer information such as Social Security numbers and health records.