Cyber insurance covers costs associated with a security incident — breach notification, legal fees, business interruption, and sometimes ransom payments — and is increasingly common even for smaller businesses as both risk and awareness of it have grown.
What it typically covers
- Costs of notifying affected customers and any required regulatory reporting
- Legal and forensic investigation costs following an incident
- Business interruption losses during downtime caused by an incident
- Some policies cover ransomware payments, though this varies significantly by policy and insurer
What it doesn’t replace
Insurers increasingly require baseline security controls (MFA, patching cadence, backups) as a condition of coverage or a factor in pricing — insurance is a financial backstop, not a substitute for actual security practices.
FAQ
Will basic security hygiene reduce my cyber insurance premium?
Often yes — many insurers now explicitly ask about MFA, backup practices, and patch management as underwriting factors, and can price accordingly.