Technologyhas transformed the way businesses work now days from providing services tocustomers online to storing data in clouds but it also brings risk to thebusinesses as well as the individuals. The services, the users, the businessowners, non-commercial organizations and the individuals all are susceptible togrowing risks like data breaches, liability arising out of cyber-attacks, liabilityarising out of disclosure of confidential and sensitive information. In orderto counter the risk associated with such threats, Cyber Insurance is necessary.Cyber Insurance does not protect from cyber-crimes but it can provide relief interms of financial funds being spent to combat cyber-crimes.Cyberinsurance or cyber risk insurance policy is basically a policy which helps theorganizations and the individuals to protect them from internet based risks ormore generally from Information Security Breaches by offsetting costs involvedin the recovery of businesses and individuals  after cyber- security Incidents.

Cyber Insurancemainly covers expenses relating to first parties as well as claims by thirdparties. Cyber Risk Insurance Policy being alike other insurance policies yetthere is no standard that defines writing the policy, so the scope of thepolicy still remains within the ambit of insurance companies but generally theinsurance companies provide protection and benefit to the organizations as wellas individuals by following reimbursable expenses i.e.  ·        Business Losses and Interruptions: Cyber Insurance Policy may includerelated items as of errors and omission policy (E&O policy) as well as monetarylosses that organizations as well as individuals suffer due to data lossbreaches, confidential information leaks, cyber defamation, etc. ·        Extortion: Cyber Insurance Policy covers thethreats associated with the policy holder’s business that are given by theextortionists which threaten to commit cyber-attacks.  ·        Forensicinvestigation: Covers the legal, technical orforensic services necessary to assess whether a cyber-attack has occurred, toassess the impact of the attack and to stop an attack.

Investigations mayinvolve the services of a third-party security firm, as well as coordinationwith law enforcement. ·        Computerdata loss and restoration: Covers physical damage tocomputer-related assets, including the costs of data recovery and restorationof hardware, software or other information destroyed or damaged as the resultof a cyber-attack.  ·        Closing the Gap Between Traditional Coverage and CurrentNeeds:Traditional insurance only coversthe liability arising out of ‘tangible property’ but cyber insurance covers thegap between the traditional policies and currently needed policies. With the increasing complexity andlikelihood of data breaches, organizations and individuals are finding cyber insuranceas a measure of security.

Cyber insurance covers first-party losses andthird-party claims, but general liability insurance covers only property damage.Cyber insurance, unlike traditional insurance, is designed to meet the needs ofcompanies in the digital age.