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 Illinois, cyber insurance is designed to mitigate the risks associated with electronic business operations by providing 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 losses incurred by the business itself and the liability arising from compromised customer information, including PII such as credit card details and Social Security numbers. Illinois businesses seeking cyber insurance should be aware that the specific coverage details and exclusions can vary significantly between policies, and it is important to carefully review these details with an attorney or insurance broker. Additionally, Illinois has enacted the Personal Information Protection Act (PIPA), which requires businesses to implement reasonable security measures to protect sensitive personal information and to notify affected Illinois residents in the event of a data breach. Cyber insurance can be a critical component in a business's overall strategy to comply with such legal requirements and to mitigate the financial impact of cyber incidents.