Data breach insurance is a sort of coverage that businesses buy to protect their financial interests in the case of a data loss. Organizations hold a wide range of data, from simple, non-critical details to sensitive government information. Hacking and faulty cybersecurity measures are two common causes of data breaches.
Data breach coverage, like other insurance policies, can include first and third-party provisions. The term "first-party" refers to coverages that apply to the insured organization only, and "third-party" refers to coverages that apply to impacted parties outside the organization.
The following are some examples of first-party data breach insurance provisions:
- The cost of a data breach investigation
- Costs of hardware and software damage
- Fines incurred as a result of data loss
- Revenue that has been lost
The following are some examples of third-party data breach insurance provisions:
- Lawsuits brought by individuals as a result of data loss
- Fees charged to individuals in the event of data loss.
The cost of a data breach includes the ransom requested by hackers for stolen data, fines and other penalties imposed by regulatory bodies and the negative repercussions of a data breach on your company's brand. In such cases, data breach insurance can help cover some or all of the costs and assist your organization in resolving the matter and mitigating losses.
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