Thin Red line between Cyber-Insurance and Privacy-Insurance

Often I have been asked to explain the cyber-insurance and it’s need to have from organizational point of view when it comes to electronic activities and at the same time I have often heard that customers asking whats the difference between cyber-insurance and privacy-act (insurance)

Therefore, I thought I’ll put this down as a post explaining the Thin Red Line between both

Both covers the technology services and products. The policies are intended to cover both liability and property losses that may results when a business engages in various electronic activities e.g. selling on the internet or collecting data within its internal electronic network.

Notably, but not exclusively both Cyber and Privacy policies cover a business liability for a data breach in which the firm’s customer’s personal information , such as SIN or Credit card number is exposed or stolen by a hacker or other criminal who has gained access to the firm electronic network. The policy coverage has variety of expenses associated with data breaches, including notification costs, credit monitoring, cost to defend claims by state regulators, fines and penalties, also loss resulting from Identify theft.

Therefore, Cyber and Privacy Insurance is often confused with technology errors and omission (tech E&O). In contrast to cyber and privacy insurance, tech E&O coverage is intended to protect providers of technology products and services, such as computer software and hardware manufactures and firms that store corporate data on an off-site basis.

Before anyone get confused what Errors and Omission Tech E&O means here.

Errors and omissions insurance (E&O) is a type of professional liability insurance that protects companies and their workers or individuals against claims made by clients for inadequate work or negligent actions.

Errors and omissions insurance often covers both court costs and any settlements up to the amount specified by the insurance contract.

Now Cyber Insurance 101:

What does AMX, HomeDepot, North Dakota Uni Sys and Target have in common? They are all part of the 342 data breaches exposing 9,015,970 personal records that have occurred till June 10, 2014, according to non-profit identity Theft Resource Center (ITRC)

Cyber Coverage can mean different things to different people but mainly cyber coverage is a mix of these four components. Errors and Omissions, Media Liability, Network Security and Privacy.

Before I continue a bit more , I would suggest to download and read IBM Data-Breach report of 2016 at (

Anyhow what interests me the most is that both Network Security and Privacy coverage  VS cyber Insurance , each covers the First-party coverage applied to direct costs for responding to privacy breach or security failure and same case with cyber insurance that policy typically covers first party as well as third party.

Another good document which I was able to search up , which I still have not finished reading yet was (

Few other abstracts which I was able to gather from different authorities for a little better understanding are as following


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