What is Cyber Business Interruption Insurance?

This insurance covers lost income when your business cannot operate due to a cyber incident. It also includes extra costs that may arise while getting your business back on track. These expenses could involve hiring temporary staff, emergency IT services, or even relocating your operations if needed. Some policies may also cover reputation management and crisis communication services to help restore your brand’s image after a cyber event.

Why is this coverage important for my business?

As businesses increasingly depend on digital systems, they become more vulnerable to cyberattacks and technical failures. These disruptions can lead to severe financial losses and damage your reputation. This insurance provides vital protection, ensuring your business can recover from such events without enduring long-term financial harm.

Does it cover data breaches?

While this coverage focuses on financial losses due to operational disruptions, data breaches are generally covered under separate cyber liability insurance. However, some policies may include elements of data breach protection, so it’s essential to review the details of your policy.

How is the loss of income calculated?

The loss of income is calculated based on the average revenue your business would normally generate if the cyber incident had not occurred. This is determined by reviewing financial records such as sales, contracts, and expected earnings.

What is the recovery period?

The recovery period refers to the time it takes for your business to return to normal operations following a cyber incident. This period’s length depends on the event’s severity and the measures needed to restore full functionality. The coverage ensures that you are compensated for income loss during this time.

Are small businesses eligible for this type of coverage?

Yes, small businesses can benefit significantly from this coverage. Due to limited resources, smaller companies are often more vulnerable to cyber threats, making this protection even more essential for them to recover from disruptions without devastating financial consequences.

Does it cover cyber extortion, such as ransomware attacks?

This insurance may cover the financial impacts of cyber extortion events, including ransom payments, data recovery costs, and the loss of income while operations are halted. It’s important to check your policy to see the exact coverage provided for such incidents.

Can I add this coverage to a wider cyber insurance policy?

Yes, many insurers offer this coverage as part of a comprehensive cyber insurance package. These packages can include additional protections such as data breach response, liability coverage, and network security, providing a complete solution to your business’s cyber risks.