Cyber insurance is a special insurance policy that covers your business’ losses and liability for intrusions into your business’s computers, computer networks, software, payment processing, and other information technology (cyber events). Cyber events that may be covered by cyber insurance include data breaches, malware, ransomware, viruses, spyware, wire transfer fraud, phishing, denial-of-service (DoS) attacks, Trojans, adware, botnets, man-in-the-middle attacks, credit card web skimming, and others.

In addition to breaching a business’s own valuable information and processes, a data breach may target a business’s sensitive customer information, such as credit card numbers, account numbers, telephone numbers, mailing addresses, passwords, driver’s license numbers, Social Security numbers, health records, and other personally identifiable information (PII).

In Alabama, cyber insurance is designed to mitigate the risks associated with electronic business operations by providing financial coverage for various cyber events. These events can range from data breaches and malware attacks to more sophisticated cyber threats like ransomware and phishing schemes. The coverage typically extends to both the business's own losses and liabilities arising from disruptions to their IT systems, as well as the exposure resulting from the theft or compromise of sensitive customer information, including PII such as credit card details and Social Security numbers. While Alabama does not have specific statutes that mandate cyber insurance, businesses may choose to acquire such policies to protect against the financial and reputational damage of cyber incidents. It's important for businesses to work with an attorney to understand the scope of coverage offered by cyber insurance policies and ensure that they align with the specific risks and regulatory requirements relevant to their operations.