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 Kentucky, as in many other states, cyber insurance is designed to mitigate the risks associated with electronic business operations by providing coverage for various types of cyber events. These policies typically cover the financial losses a business may suffer due to incidents like data breaches, malware, ransomware, and other cyber threats, as well as the liability for damages to third parties whose information may have been compromised. Kentucky businesses that handle sensitive customer information, such as PII, are particularly at risk and may benefit from cyber insurance to protect against the financial and reputational costs of a cyber event. While there is no specific state statute in Kentucky that mandates cyber insurance, businesses are encouraged to assess their cyber risk exposure and consider cyber insurance as a component of their overall risk management strategy. It's important to note that the terms and coverage of cyber insurance policies can vary widely, so businesses should work with an attorney to understand the specific protections offered by a policy and ensure it aligns with their unique risk profile.