With increasing interconnectivity, globalisation and commercialisation, and with data privacy legislation becoming tougher in many countries including the US, cyber-crime can have significant impact on organizations in many ways. The costs of business interruption and regulatory actions could be equal to or even exceed direct losses from a data breach. Reputational damage can also be significant.
In fact cyber-crime has an estimated annual cost to the global economy of $445bn.
Cyber insurance usually covers network and website downtime, business interruption, defence and penalties in relation to data breaches and privacy regulations, cyber extortion, malware/hacking attacks, and multimedia and intellectual property liabilities.