What's Covered Companies interested in hacker insurance can buy coverage either as a package or la carte. Some policies only pay for risks associated with loss or misuse of intellectual property. Others cover liability for misuse of a company's site by a third party, or damage caused by an outside hacker. Premiums are generally based on a company's revenue, as well as the type and amount of coverage being sought. Given the range of costs and coverage, industry officials warn potential buyers to be wary.
Some policies cover only the amount of net income lost due to hacking.
A better choice for some companies may be coverage for lost revenue. Numerous variables can affect premiums. Just as a buyer of auto insurance can choose a high dollar deductible to lower the premium, hacker insurance buyers can choose different waiting periods before coverage begins. For instance, a policy that begins paying for business losses just four hours after a hacker shuts down a site may cost more than a policy that begins paying after 24 hours of downtime. These waiting periods, called time element deductibles, are variable and depend on the kind of business being covered and the amount of risk a business may face.