You can get insurance for about anything. From homes, your health, to even a singer’s voice, cyber insurance is a newer but growing market. Cyber insurance is a type of property and liability insurance created by cyber risks. When you think about cyber security risk, hacking usually comes to mind. This might be data breaches or denial-of-service attacks. But what about the second and third-order effects associated? Media and reputational damages, legal liability from other damaged parties, and more.
Quantifying cyber risk into actual dollars is no walk in the park. The inter-dependencies between business and computer networks make this even more difficult. The actual damages of a cyber incident or hack can easily dwarf paper estimates.
Insurance companies model payouts using historical data of comparable hacking incidents. But with cyber security being so new, there isn’t nearly as much data as fields like car or health insurance. It’s hard to tell when the next “100-year flood” event in cyber will come and wipe out everything. much of the gains accrued by the cyber insurance industry.