What is meant by "cyber insurance"?

The concept of "cyber insurance" primarily revolves around its role in helping organizations manage the financial impacts of cyber incidents. This type of insurance is specifically tailored to cover various costs associated with data breaches and other cyber-related threats. For businesses, the financial repercussions of a cyber attack can be substantial, encompassing expenses such as legal fees, regulatory fines, crisis management, forensic investigations, and even potential compensation to affected parties.

Cyber insurance aims to provide a safety net that can offset these unexpected costs, allowing businesses to recover more swiftly and effectively after a cyber incident. It essentially acts as a financial risk management tool, acknowledging that while not all risks can be eliminated, they can be mitigated through appropriate insurance coverage. This differentiates cyber insurance from other general types of insurance that may not specifically address the unique challenges posed by the digital landscape.