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Cyber Insurance & Business Interruption Coverage

Cyber Insurance & Business Interruption Coverage

As more and more businesses rely on computers, electronic systems, and networks to conduct their operations, any disruption to those systems could mean an interruption in business. Businesses that fall victim to cyberattacks may be taken offline, unable to access key data, or locked out of their systems for hours, days, or even weeks. With business interruption coverage on a cyber policy, businesses can actively protect against this potential risk exposure.

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How Cyberattacks Cause Business Interruptions

Cyberattacks can come in many forms, and some may render your business inoperable. If your business depends heavily on technology infrastructure, disruption of those systems could bring your business operations to a halt. Here are a few examples of how a cyberattack could cause a business interruption:

For larger businesses with dedicated IT departments, recovering from these types of cyberattacks may be quick, and downtime can be kept to a minimum. For smaller businesses without the technical expertise, however, one cyberattack could mean a prolonged closure of your business, leading to significant financial losses.

Does cyber insurance cover business interruptions?

Many cyber insurance policies include business interruption coverage, providing funds to cover losses during an interruption directly caused by a cyber event. Cyber business interruption coverage typically covers:

Business interruption coverage does not always come with cyber insurance, however, so it is best to check with your broker or agent prior to purchase. If it’s not included by default, it may be available as an endorsement on your policy.

Does cyber insurance cover contingent business interruptions?

Contingent business interruptions can occur if a key partner, supplier, or other supporting business suffers an event that directly impacts your ability to earn revenue. Contingent business interruption coverage on a cyber policy can provide funds to cover losses during an interruption caused by a third party’s business interruption.


Contingent business interruption coverage is not available on all cyber insurance policies. This coverage has only more recently been adopted by insurers, so you’ll need to check policy language carefully to understand whether you’d be covered in a contingent business interruption.

Cyber Business Interruption vs. Traditional Business Interruption

You may be familiar with traditional business interruption coverage, also called business income coverage, which often comes as an added endorsement to a commercial property policy. This type of coverage is intended for businesses with physical property (e.g., a retail store or office) and provides coverage for losses during an interruption of business caused by property damage. 

Business interruption coverage on a cyber policy is different in many ways, given there is usually no tangible physical property that is damaged in a cyberattack. Below, we outline a few of the key differences:

Protecting Your Business Against Cyberattacks

The best way to prevent a cyber-related business interruption is to implement robust cybersecurity protocols. Here are a few simple actions you can take:

Compare Cyber Insurance Quotes

There are a variety of insurers and brokers in the market, and it may be difficult sorting through all of the options. AdvisorSmith analyzed a variety of cyber policies and determined the best cyber insurance companies for small businesses. To determine the best cyber insurers, AdvisorSmith considered a number of factors, including financial strength ratings from AM Best and Standard & Poor’s, customer satisfaction data from several J.D. Power studies, complaint ratings from the National Association of Insurance Commissioners, available features and options, and availability of information and ease of use of the insurers’ websites.

» Read our full review of the best cyber insurance companies.

RankCompanyAdvisorSmith Rating
1Hiscox4.9 / 5.0
2Chubb4.8 / 5.0
3The Hartford4.7 / 5.0
4AIG4.7 / 5.0
5CNA4.6 / 5.0
6Arch4.5 / 5.0
7Hanover4.5 / 5.0
8Intact4.4 / 5.0
9Beazley4.3 / 5.0
10Axis4.3 / 5.0

Final Word

As cyber and ransomware attacks are hitting businesses with more frequency, it’s important to understand just how impacted your business could be if your website, computer systems, or data were made unavailable. If your business must shut down or halt operations in the wake of a cyberattack, having business interruption coverage on a cyber policy can help to recover some of your losses.

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