Digital threats have become a growing concern for both individuals and businesses. Millions, even billions, of US dollars are lost every year to cybercrime from stolen or ransomed private data and the disruption of business operations due to cyberattacks.

Cyber insurance, also known as cyber liability insurance, is a recent addition to insurance products and services intended to address the effects of cybercrime. This article explains how cyber insurance protects your business or organization from malicious actors in the Digital Age.

What is Cyber Insurance

Cyber insurance or cyber liability insurance is an insurance product that provides commercial coverage from financial and even reputational losses from data breaches and other forms of cyberattacks.

Like other insurance products, cyber insurance allows policyholders to transfer part of the risks associated with the coverage to the insurer for a monthly fee. The cost of protection varies, but there are policies that even small businesses and organizations can afford because they are often targets of cybercriminals, especially those looking for easy victims or targeting bigger companies through their contractors and providers.

There is another kind of cybersecurity coverage called data breach insurance, but it is a limited service that only covers data-related cybercrime. It is also different from general liability or commercial property insurance and is often taken separately from these products.

Note that even if your business or organization is not a large technology or financial entity, it does not mean you do not need protection. Any company or entity that deals with personally identifiable information (PII) and financial information, such as taxes and customer invoices, and is connected to the wider internet, is vulnerable to cybercrime and might need cyber liability insurance.

What Does Cyber Liability Insurance Cover?

There are two general areas of coverage for cyber insurance: first-party and third-party coverage. These insurance products also often provide pre- and post-incident support as well as coverage for the costs of data breaches.

Here’s how cyber insurance protects you:

First Party Coverage

This coverage deals with the direct costs of the cybercrime. If a cybercriminal disrupts your business or steals data, your insurance may cover the following:

• The cost of notifying customers and other stakeholders of the breach and its implications
• Monitoring for any financial effects of the breach, like credit card fraud
• Restore lost or damaged data and return your digital systems and services to operational status
• Hire specialists to identify the causes of your breach
• Hire specialists to help you address the reputational issues stemming from the breach and service disruption

Depending on your plan, it may also cover crisis management consultants, income loss due to the breach, and even ransom payments for extortionists.

Third Party Coverage

This coverage addresses lawsuits and other damages resulting from the cybercrime. Your plan may cover the following:

• Lawyer’s fees and other legal expenses
• Settlement payouts to your plaintiffs
• Fines for failure to comply with relevant laws

What’s Not Covered

Given the broad range of coverage provided by cyber liability insurance, there are instances and events not under the product’s umbrella, although other kinds of insurance may be able to cover these.

• Employment-related issues, like wrongful termination of staff related to the attack
• Patent or copyright infringement
• Incidents that are considered Acts of God
• Portable devices
• Practices that lead to security failures
• Bodily injury or property damage

Reliable Cybercrime Protection

Businesses and organizations of every scale and size cannot avoid going digital. While there are many benefits to having your operations online, they also open you up to many vulnerabilities. While there are many good practices to ensure your cybersecurity, the constantly evolving nature of these threats can lead to a lot of uncertainty. 

Getting protected with cyber liability insurance helps reduce risks and supports your business amid a challenging digital security landscape.

Our agents at Reliable Insurance Brokers will help ensure that you and your business or organization get the best cyber protection through our extensive list of providers and products. Give us a call, and we will help you cut through the technical details and make the right decisions for your cybersecurity needs.

Contact Information for Inquiries and Support

If you have any questions or need assistance with your insurance, feel free to reach out to us:

• Call: +63 2 8631 9285 to 86
• Mobile: +63 917 138 5120
• Email: info@reliable-insurance.ph
• Messenger: m.me/reliable.insurancebrokersph 

Sources:

• IBM (No date), What Is Cyber Insurance?
• Investopedia (2024, April 11), What Is Cyber Insurance?
• ABI (No date), What Does Cyber Insurance Cover?
• TechTarget (2025, February 7), What Is Cyber Insurance, And Why Is It Important?