Cyber Liability Insurance for States

Perfect cybersecurity is impossible, and even the most sophisticated defenders fall prey to cyber attacks. This residual risk can potentially impose massive costs on an organization. Even mundane security breaches—a misplaced laptop storing confidential data—can trigger costly response procedures. States can offset the cost of a breach by purchasing cyber liability insurance.

Cyber liability insurance has existed in some form for many years, but not until recently have most major insurance providers begun to promote it. However, it remains a nascent field, and many policies are highly individualized to each policy holder. This document provides a broad overview of cyber liability insurance, highlights key questions that states should consider, and suggests authoritative resources.