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 Washington State, cyber insurance is designed to mitigate the risks associated with electronic business operations by providing coverage for various types of cyber events. These events can range from data breaches and malware attacks to more sophisticated intrusions like ransomware, phishing, and denial-of-service attacks. Cyber insurance policies typically cover the financial losses a business may incur due to such incidents, including the costs associated with data recovery, legal fees, notification expenses, and any regulatory fines. Additionally, these policies may offer liability coverage if a business is sued for failing to protect customer data, which can include PII such as credit card and Social Security numbers. It's important for businesses to carefully review their cyber insurance policies to understand the extent of the coverage, exclusions, and any obligations they have in the event of a cyber incident. While the state of Washington does not mandate cyber insurance, businesses are encouraged to consider such policies as part of their risk management strategy, especially given the state's laws on data breach notifications and consumer protection.