What Cyber Insurance Does and Does Not Cover
Mar 12, 2026
When a business faces a cyberattack, such as ransomware, email-based fraud, or data theft, the financial fallout can escalate quickly. Cyber insurance covers the cost of responding to these events after they occur. Instead of preventing attacks, like firewalls or monitoring tools do, it provides financial support for recovery, legal exposure, and required notifications.
Cyber insurance falls into two categories. First-party coverage focuses on the company’s own costs: restoring corrupted data, repairing damaged systems, hiring forensic teams, notifying affected customers, and setting up crisis communication services. Third-party coverage applies when outside parties claim harm, covering legal defense, settlements, and regulatory actions arising from the loss of sensitive information…