10 Costs Your Cyber Insurance Policy May Not Cover

All the things you might think are covered but that don't actually fall under most policies.
Sales loss during downtime
Losses incurred before a 'waiting period' ends
Third-party mistakes
New hardware
Software upgrades
Social engineering
Bodily injury or property damage
PCI fines
Reputation damage
Loss from account takeover schemes

If you handle enterprise security, chances are good you've purchased - or at least researched - cyber insurance coverage. After all, it's not a matter of "if" you'll be breached, but "when," and it's important to know you'll be covered when the time comes.

Cyber insurance is a relatively new field and coverage is evolving as the threat landscape shifts. Depending on your policy and the threat you're addressing, there are subtleties in your policy that may not be evident at first but are important to ask about when you're purchasing.

"Unlike your auto policy, which is pretty standard wherever you buy, there is very little continuity in the cyber insurance marketplace from policy to policy," says David Bradfod, chief strategy officer and director of strategic partner development at Advisen.

While you may know the basics of insurance policies, it's more difficult to navigate the details of each one. Which costs will be covered in the event of a data breach or cybeattack, and which won't? It's the kind of information you don't want to learn after an incident occurs.

"You always have to read the fine print and make sure you actually got the coverages you were expecting," says Samit Shah, insurance solutions manager at BitSight.

Roman Itskovich, co-founder and chief risk officer at cyber insurance startup At-Bay, points out that most brokers and insurers don't really know exactly how much coverage is needed in a specific event. Many break down policies so each aspect of a breach (legal, forensics, etc.) is covered for a certain amount. Other policies cover one amount to split amongst these services.

The trend is toward broader, more expensive coverage instead of restrictive policies. Even so, many costs related to cyber events still aren't covered by cyber insurance policies. Here's a rundown of things you may think are covered, but actually are not.


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