What is business interruption coverage in cyber insurance?

It covers lost income and extra expenses when a cyber incident disrupts your business operations.

Business interruption coverage in cyber insurance is designed to protect your company from the financial losses that can occur when your business operations are halted due to a cyber incident. This could be due to a variety of cyber events such as a data breach, ransomware attack, or any other form of cyber attack that disrupts your ability to conduct business as usual. When such incidents occur, your business may not be able to operate and generate revenue for a period of time, leading to a loss of income. Additionally, there may be extra expenses involved in getting your business back on track, such as costs associated with restoring data, repairing systems, or deploying temporary solutions to manage operations during the downtime. Business interruption coverage provides financial support to help cover these lost revenues and additional costs, ensuring that your business can survive during disruptions and recover more swiftly.

Imagine you own a retail business that heavily relies on an online platform to sell products. One day, your website is targeted by a ransomware attack that encrypts your data and renders your online store inoperable. For two weeks, you're unable to process orders or make sales, leading to a significant drop in income. Fortunately, your cyber insurance policy includes business interruption coverage, which compensates you for the lost revenue during these two weeks and helps cover the costs of removing the ransomware and restoring your website to full functionality. This financial support enables you to keep paying your employees and managing other expenses without falling into debt.

As a business owner, consider evaluating your current insurance policy to ensure it includes comprehensive cyber insurance with business interruption coverage, especially if your operations rely heavily on digital infrastructure. It's also wise to regularly back up your data and have a response plan in place for potential cyber incidents. This preparedness can minimize downtime and reduce the impact of cyber events on your business. Ensure your staff is trained to recognize phishing attempts and other cyber threats to prevent incidents that could lead to interruptions.