Skip to content
Security calendar_today Updated: 7 April 2026 schedule 3 min read

Consider a Cyber Security Insurance

A cyber insurance covers the financial damage from a data breach or cyber attack. This article explains what a cyber insurance covers, when it makes sense, and what to look out for.

summarize Key Takeaways
  • check_circle A cyber insurance covers costs from a data breach or cyber attack: from forensic investigation to fines and liability
  • check_circle The average cost of a data breach for an SME is between 10,000 and 50,000 euros
  • check_circle Insurance does not replace good security - insurers require you to have basic measures in place
  • check_circle Check if your existing business insurance already covers cyber incidents

The cost of a data breach is higher than you think

A data breach or cyber attack costs an average SME between 10,000 and 50,000 euros. In some cases considerably more. These costs consist not only of a potential fine, but also forensic investigation, legal advice, notifying data subjects, reputation damage, and potentially damage claims from affected individuals.

A cyber insurance can absorb a large part of these costs. It’s not a miracle cure and it doesn’t replace good security, but it’s a sensible safety net.

What does a cyber insurance cover?

Coverage varies per insurer, but most policies cover:

Direct costs after an incident

  • Forensic investigation - determining what happened and how
  • Legal advice - assessing notification obligation and liability
  • Notification - costs of informing data subjects and the supervisory authority
  • Crisis management - PR support and communication

Financial damage

  • Business interruption - revenue loss when systems are unavailable
  • Ransom - some policies cover (part of) ransomware payments
  • Fines - coverage of administrative fines varies per policy and jurisdiction

Liability

  • Damage claims - when data subjects claim damages
  • Legal costs - defence against claims

When does it make sense?

A cyber insurance is worth considering if you:

  • Process personal data of customers or employees - that applies to virtually every business
  • Depend on your IT systems - business interruption can be costly
  • Process sensitive data - medical data, financial data, national ID numbers
  • Have limited IT capacity - you can’t handle everything yourself during an incident

What to look out for

  • Coverage scope - specifically check whether fines, ransomware, and business interruption are covered
  • Excess - how much do you pay yourself?
  • Exclusions - read the fine print about what is not covered
  • Prevention requirements - most insurers require basic measures (password policy, updates, backups). Without those, your claim may be rejected
  • Response services - some policies offer 24/7 access to an incident response team

Insurance does not replace security

A cyber insurance is a safety net, not a replacement for good security. Insurers check that your basic security is in order before accepting you. And with a claim, they check whether you’ve met the prevention requirements.

So first make sure your basic security is in order and then consider whether a cyber insurance fits your risk profile.

auto_awesome Map your security situation

GDPRWise helps you inventory which data you process and what risks you face. A good starting point for determining your insurance needs.

GW
GDPRWise Editorial

This article was written by the GDPRWise team and reviewed by our privacy experts. We regularly review our content for accuracy and legal correctness.