Question 28

Cyber Liability Insurance protects companies from losses when hackers access private data.

Cyber Liability Insurance is designed to provide coverage for companies facing financial losses due to data breaches or cyberattacks, specifically when private data is accessed by unauthorized individuals.

A) It only covers business interruption costs.

This option is incorrect as Cyber Liability Insurance encompasses a broader range of coverage beyond just business interruption. While business interruption may be a component of some policies, the primary focus is on the financial losses related to data breaches and cyber incidents.

B) It only covers expenses related to cyber terrorism.

This statement is also incorrect. Cyber Liability Insurance does not limit itself solely to cyber terrorism; rather, it covers a wide array of cyber risks including data breaches, which may or may not involve acts of terrorism.

C) It protects companies from losses when hackers access private data.

This option is correct. Cyber Liability Insurance specifically addresses the financial repercussions faced by companies when hackers breach their systems and access sensitive information, making it a crucial safeguard for businesses in today's digital landscape.

D) It protects individuals from hackers.

This option is incorrect because Cyber Liability Insurance is primarily aimed at organizations and businesses rather than individuals. Individual protection from hackers typically falls under personal cyber insurance policies or other forms of personal insurance.

Conclusion

The correct answer, C, clearly defines the main purpose of Cyber Liability Insurance, which is to protect companies from the financial fallout of data breaches. All other options fail to accurately represent the comprehensive nature of this insurance, either by narrowing its focus or misidentifying its target audience.