In today’s connected world, even a brief cyber disruption can cause major losses. When a ransomware attack locks your systems, or a data breach forces your operations offline, your business doesn’t just face repair costs — it loses valuable time, revenue, and customer trust.

That’s where cyber business interruption coverage comes in. It’s one of the most critical — yet often overlooked — parts of a cyber insurance policy.

What Is Cyber Business Interruption Coverage?

Cyber business interruption coverage helps protect your business from the financial losses that result when a cyber event disrupts your operations.

Unlike traditional business interruption insurance (which applies to physical losses like fires or storms), cyber business interruption applies to digital disruptions — things like a malware infection, system outage, or ransomware attack that halts your ability to conduct business.

What It Typically Covers

Here are the key areas where this coverage steps in:

1. Lost Income
   If your systems are down due to a cyberattack, this coverage helps replace the income you would have earned during the downtime — keeping your business financially stable while you recover.

2. Extra Expenses
   It covers additional costs incurred to get your business running again — such as hiring IT specialists, leasing temporary equipment, or paying for expedited services to meet customer deadlines.

3. Dependent Business Interruption (Third-Party Outages)
   Many businesses rely on vendors or cloud service providers. If one of them suffers a cyber incident that affects your ability to operate, this coverage can help recover your lost income.

4. System Restoration Costs
   Restoring data, reconfiguring networks, and rebuilding applications can take time and resources — cyber business interruption coverage often helps pay for those recovery efforts.

Why It’s So Important

The reality is that a cyber incident doesn’t just affect your data — it can grind your entire operation to a halt. The financial impact can be devastating, especially for small and mid-sized businesses that don’t have the resources to absorb prolonged downtime.

Here’s why cyber business interruption coverage is vital:

• Keeps Cash Flow Stable: Even if your systems go down, you can maintain payroll and overhead expenses.

• Supports Faster Recovery: The coverage gives you the funds to act quickly, restoring systems and resuming operations sooner.

• Covers Third-Party Outages: In today’s interconnected economy, even vendor downtime can hurt your bottom line — this coverage helps fill that gap.

• Protects Long-Term Viability: A few days of downtime can damage relationships and cash reserves. Cyber business interruption coverage helps prevent short-term disruption from becoming a long-term setback.

The Bottom Line

When a cyber incident strikes, it’s not just your data that’s at risk — it’s your ability to operate. Cyber business interruption coverage helps ensure that your company can recover quickly and keep moving forward, even in the face of a major disruption.

At Redwood Insurance Solutions, we help Michigan businesses identify their vulnerabilities and build cyber insurance programs that fit their needs — including coverage for the downtime that can hurt the most.