Top 5 Benefits of Cyber Insurance Coverage

Cyber Insurance Benefits

The basic fact about cybersecurity is that there is no such thing.

In reality, there exists an ongoing arms race between cyber attackers and defenders and there is never any assured victory on either side.

The history of cybersecurity goes back thousands of years to a time when kings, states, and their armies used complex codes and ciphers to send and receive messages without being intercepted by an enemy.

In those times, an encrypted message was only as secure as the strength of its armed defenders and the complexity of the code itself relative to the intelligence and determination of potential "hackers." 

In today's cybersecurity world, the case is very much the same, only it is rendered by modern technology.

This is why updates to your computer operating system are so important.

Regular updates allow a software company to apply patches that cover the latest threats and vulnerabilities of a piece of software.

But even this is no guarantee that a hacker will not be able to access your data.

In reality, successful attacks happen every day. Banks are successfully attacked, and businesses of all kinds fall prey to hackers, as do private individuals. 

All of this remains true even in the face of the best cybersecurity applications, tools, and practices.

When a person is only responsible for his own data security, this kind of risk may be acceptable.

But when you own a business that handles the payment information of customers they are at risk as well.

That means you could be held liable for successful attacks despite all of your best efforts. 

This liability risk that merchants who do business online face is the primary rationale for cybersecurity insurance.

It is not the only reason to buy cyber insurance coverage, but it is increasingly seen as a necessary tool to do business, and it is even a regulatory necessity for some industries and business models. 


Overview Of Growing Cyber Threats In 2023 reports that 34% of executives polled by the Deloitte Center for Controllership reported that their organizations had been targeted by hackers during the previous fiscal year.

Of that group,12% reported that their organizations had been hit by multiple attacks.

More disturbing is the fact that nearly 50% of executives said that their organizations had suffered successful attacks aimed at their financial data.

These executives almost unanimously stated that they expect these attacks to increase in number, intensity, and power.

Despite this, just over 20% of these same executives claimed that their finance teams work closely with cybersecurity experts. 

This means nearly half of companies that handle the payment information of their customers and clients are not taking cyber liability seriously.

If this is the case, imagine how few are leveraging the increasingly necessary protection of cyber insurance coverage. 

Unfortunately, surveys like these offer an incomplete view of the state of cybersecurity in business.

Chances are that the real risks to businesses are much greater than the available evidence.

This, coupled with the irreducibly tenuous reality of data security, is yet a further rationale for cyber insurance coverage. 

Taking all of this into consideration, we establish the necessity of cyber insurance. But cyber insurance coverage is not merely a necessary protection, it also offers a number of proven benefits which make it well worth the investment. 


Top Benefits Of Cyber Insurance Coverage 

Our team of cyber insurance coverage experts has identified the five following benefits of this type of protection.

These are not the only benefits of cyber insurance you can enjoy, but they are the most important, significant, reliable, and measurable benefits of this type of protection.

While some of the benefits of this type of coverage may or may not manifest, the following benefits are guaranteed and all other benefits are their products. 


Benefit #1: Financial Protection 

Cyber insurance coverage offers financial coverage for the losses you may sustain as the result of a successful cyber attack. More importantly, when the financial data of your clients and customers is breached, and you are held liable, cyber insurance coverage can help cover your losses. 

The two components of cyber insurance coverage are First-party cyber insurance and Third-party cyber liability insurance.

Their coverage breaks down as follows: 


First-Party Cyber Insurance Coverage (FPCIC) 

FPCIC covers the costs of investigating and responding to cyber-attacks and the monetary costs of related operations. 
  • Forensic investigations: Coverage for the costs of identifying the nature and source of an attack. 
  • Breach Legal counsel: Coverage for the cost of legal advice and representation after an attack. 
  • Notifications: Coverage for the cost of notifying victims and potential victims of an attack. 
  • Victim credit monitoring: Coverage for the cost of legally obligatory monitoring of the credit status of victims.
  • Cyber extortion: Coverage for losses resulting from a ransomware attack. 
  • Data recovery, business interruption: Coverage for the costs associated with recovering data and profit losses during resulting downtime. 
  • Reputation damage: Coverage for the costs of damage to your reputation resulting from breaches of customer and/or partner data.


Third-Party Cyber Liability Insurance (TPCLI) 

TPCLI provides a company with fiscal indemnity from damages resulting from attacks on the data of your clients and customers while interacting with your organization. 

  • Network security and privacy liability: Coverage to insured parties for losses resulting from errors, omissions, or negligence.
  • Regulatory liability: Coverage for fines associated with costs resulting from regulatory compliance violations.
  • PCI Fines: Coverage for fines or penalties issued by bodies enforcing the Payment Card Industry Data Security Standard. 
  • Other Regulatory Fines and Penalties: There is a long list of potential fines and penalties that can result from failures to meet regulatory compliance and failure to protect customer/client/partner data.

Cyber liability insurance can protect policyholders from most of these. 


Benefit #2: Risk Management

Any effort to guard against or prevent cyber-attacks is essentially a cyber risk management plan.

This is because cyber attacks cannot be prevented 100% of the time.

This is why cyber liability insurance is a key item in your cyber security toolset.

Cyber liability insurance gives you several protections, including all of those listed under benefit #1.

But perhaps the most important benefit is the peace of mind that your clients, customers, and partners will enjoy. 


Benefit #3: Legal & Regulatory Compliance 

Among the biggest risks for any organization that handles the sensitive payment information of others is regulatory compliance.

Violations often result by accident after laws change or after protections become ineffective for technical reasons.

This is why protection from regulatory fines and fees is a key benefit of cyber liability insurance. 

Examples of high-profile cyber liability fines include, as described by, include:

  • Didi Global: $1.19 billion Amazon: $877 million
  • Equifax: $575 Million 
  • Instagram: $403 million T-Mobile: $350 million Facebook: $277 million 
  • WhatsApp: $255 million Home Depot: $200 million 
  • Capital One: $190 million Uber: $148 million 
  • Morgan Stanley: $120 million 
  • Google Ireland: 102 million 


Benefit #4: Reputation Management 

The people who count on you to protect their valuable, sensitive, payment data will take great comfort knowing that you are the holder of a comprehensive cyber insurance policy.

More importantly, your reputation will remain intact after the inevitable successful cyber attack does come your way.

In today's online environment, this type of protection is an indispensable part of reputation management. 


Benefit #5: Peace of Mind Protection 

Your clients customers, and partners are not the only ones who will sleep easier at night knowing that any data breaches will not destroy your ability to do business.

This peace of mind is invaluable.

It means the difference between being able to focus on mission-critical tasks and constantly worrying about the very real potential of a disastrously expensive attack.

Cyber liability insurance will save you precious vital energy, energy you need to manage, run, and grow your business. 


Cyber Insurance Costs 

According to, the average cost of cyber security liability insurance per year is $1,485 in the United States.

The Insureoen company offers a similar appraisal of the cost at an average of $145 a month for an annual total of $1,740 per year.

These averages are not exorbitantly expensive, and the costs can be lower, depending on your needs and priorities. 

When you factor in the resulting return on investment (ROI) that comes through peace of mind, reputation management, and regulatory cost savings, the value of a comprehensive cyber liability insurance policy is likely to improve your earnings in the final analysis. 

When leveraged properly, your cyber liability coverage will be a significant boost for your overall company profile.

It will make you more attractive to investors and customers alike.

Over the longer term, it can mean better stock prices and endurance in this changing business climate. 


How to Apply for Cyber Insurance Coverage 

Working with a reputable cyber insurance liability insurance provider makes applying for coverage easy.

You will enjoy comfort in knowing that qualified experts will oversee your information security needs.

These experts will explain the techniques and technologies used to secure your data.

Most importantly, you will obtain a clear view of policies, processes, and coverage amounts which will be put in place to cover your data vulnerabilities. 

Expertise & Professionals Your Cyber Liability Coverage Provider Can Make Available

  • IT team or vendors handling your IT network 
  • Accounts receivable 
  • Legal counsel on the legal landscape of cyber risk 
  • Risk management professionals 
  • Human resources experts 
  • Financial officers 
  • Privacy officers 
  • Marketing security experts 
  • Executives with cyber liability expertise 

The most important step to applying for cyber liability insurance is to be honest and upfront about your cybersecurity infrastructure so that the relevant experts can help you craft a policy that will work for your unique business profile. 



Because it is next to impossible to predict the timing and nature of the next successful cyber attack against your data and that of your customers, taking action now is critical.

Working with qualified cyber liability experts makes developing a strong liability plan a straightforward process.

Because cyber liability insurance is a relatively new type of coverage, and a necessary one, adopting the new standard of protection can put you ahead of the competition in your industry. 

Leveraging the ability to survive a successful cyber attack now means you can survive in a climate where your competitors cannot, leaving you to serve more accounts with greater security. 

Get in touch today to learn more, and get the most out of this valuable protection when it counts most.

Our team of experienced advisors is standing by to answer all of your cyber liability insurance questions. 




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