What cyber insurance actually covers in Australia is financial loss and liability arising from cyber attacks and data breaches, with two main parts first party and third party. First party cover covers your own business losses including business interruption loss of income if your systems are down due to ransomware or hacking, typically covering 3 to 12 months lost profit, data recovery and restoration costs to recover data from backups, cyber extortion costs including ransom payment negotiation and payment itself up to limit, often $100K to $1M, forensic investigation costs to determine cause of breach by IT experts, legal advice costs, notification costs to notify affected customers under Notifiable Data Breaches scheme which can cost $50K to $200K, credit monitoring for affected customers, and crisis PR costs. Third party cover covers your liability if a third party sues you because their data was breached from your systems, including legal defence costs, settlements, and regulatory fines and penalties where insurable, plus PCI fines if credit card data breached. For example, if you are a small business with $500K turnover and suffer ransomware, cyber insurance with $500K to $1M limit would cover IT forensics $10K to $30K, ransom negotiation, data recovery, business interruption $20K, and notification costs. Policies from QBE, Chubb, Zurich, Allianz and AIG in Australia offer limits from $100K to $50M+, with 24/7 incident response hotline. It does not cover physical damage or known unpatched vulnerabilities.
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