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 Tennessee, cyber insurance policies are designed to mitigate the risks associated with electronic business operations by covering the financial losses that can result from various cyber events. These policies typically address costs related to data breaches, malware, ransomware, and other cyber threats that compromise a business's or its customers' sensitive information. The coverage can extend to expenses such as notification costs, credit monitoring services, legal fees, and regulatory fines. Tennessee businesses seeking cyber insurance should be aware that the specific coverage details and exclusions can vary significantly between policies and insurers. It is important for businesses to carefully review the terms of a cyber insurance policy to ensure that it aligns with their risk profile and provides adequate protection for the types of cyber events they are most likely to encounter. While there is no specific state statute in Tennessee that mandates cyber insurance, businesses that handle personal information are subject to state laws regarding data breach notification and the protection of personal information, which may influence a business's decision to obtain cyber insurance.