# Cyber Insurance for Energy Economic Risks
### The Proposed Approach and Novelties  
This work introduces a cyber insurance model specifically designed for ICT-integrated multi-energy systems to mitigate the risks associated with cyberattacks, particularly false data injection (FDI) threats. Tailored to meet the critical needs of these systems, the model covers immediate post-attack expenses such as system diagnosis, component isolation, and restoration, focusing on risks to data and control systems that may disrupt operations. It calculates premiums based on the system's risk profile, incorporating factors like complexity and past cyber incidents. The model strategically combines risk management with financial tools to ensure continuous operation, which is crucial for multi-energy systems. Additionally, it proposes a novel two-stage hierarchical cyber insurance planning (TCIP) model that optimizes insurance costs and operational efficiencies through risk transfer and real-time defense strategies. The TCIP model employs a moment-based Distributionally Robust Optimization (DRO) method, ensuring adaptability to FDI threats. Its effectiveness is demonstrated through simulations in a 33-20 distribution multi-energy grid (MEG) system, showing significant reductions in load shedding and operational costs. This paper introduces a novel, cooperative, risk-management strategy that revolutionizes traditional approaches to cyber risk in power grid systems. Unlike conventional methods that primarily focus on financial risk transfer, this innovative strategy fosters a dynamic collaboration between insurers and grid operators, embedding proactive and reactive measures to robustly counteract cyber threats. The insurer's involvement extends beyond mere post-incident financial restitution; it encompasses active participation in incident management, supplying specialized expertise and advanced cybersecurity technologies that are critical for rapid and effective incident response. This collaborative effort not only expedites the recovery process but also minimizes downtime and operational disruptions. Insurers contribute their extensive knowledge and resources, which are crucial for swiftly identifying, containing, and mitigating cyberattacks. This enables grid operators to customize their response strategies to specific threats, significantly enhancing the system's defensive capabilities. Moreover, the mutual engagement in developing and implementing comprehensive cybersecurity protocols, conducting thorough risk assessments, and maintaining ongoing system monitoring ensures that vulnerabilities are preemptively identified and addressed. The strategy introduced in this paper promotes a shared-responsibility framework, where both insurers and the insured party actively participate in the intricate web of decision making and risk management. This approach not only enhances immediate response capabilities but also bolsters long-term system resilience against cyber threats. It represents a paradigm shift in the understanding of cyber insurance, positioning it as a vital, integrated component of holistic cyber risk-management strategies for power grids. This cooperative risk management model is not just a theoretical construct but a practical, innovative solution that significantly advances the security and robustness of power systems, offering a blueprint for future approaches to infrastructure protection. In Figure 1, a graphical summary illustrates the multifaceted rationale behind our study, highlighting the complex interplay between enhancing cybersecurity, optimizing economic outcomes, and advancing research methodologies in smart city energy systems. The first segment of the diagram emphasizes the critical need for robust cybersecurity measures to address inherent vulnerabilities and minimize the economic impacts of cyber incidents on the interconnected infrastructure of smart cities. This protection is essential in preventing operational disruptions and costly recoveries following cyber threats.