Explain like I'm five · Security

What is Cyber Insurance?

Cyber insurance, told as a story about a merchant who takes a little now and pays out a lot on the day you are robbed.

WOOF!and still, one gets throughthe doors are locked and the dog is awake — and still, sometimes, you get robbed

However well you guard, you can still be robbed.The doors are locked and the dog is awake. And still, now and then, one gets through — no castle is perfect.

what a break-in costsputting it backcarpenter and spare chesttelling the guestsletters go outFINEthe inspector's finefor the rules not keptCLOSEDdays with no tradewhile the doors were shutthe king's coffer empties — it costs more than the thief took

A break-in costs a lot. Fixing, telling, fines, and days with no trade.Putting the chest back, letters to the guests, a fine to the inspector, and no trade while the doors are shut. It costs more than the thief took.

the insurance merchantthe kinga little every monthon the day you're robbed, a big sackthe thief camepay a little now, get a lot back if robbed — that's thief insurance

Cyber insurance is a promise: pay a little now, get a lot back if you are robbed.Every month the king pays the merchant a few coins. On the day a thief gets in, the merchant brings a big sack — for the fixing, the telling and the fines.

A little in advancea few coins every month
Paid when robbedfor fixing, telling and fines
The merchant asks firstlocked doors? a spare chest?
It won't lock the doorlocking is still our job
first, a few questionsTHE MERCHANT'S CHECKLISTthree checks at the door?a spare chest far away?a plan for when a thief gets in?does the carpenter patch holes?no plan? the price doublesor no deal at allthe better-guarded the castle, the cheaper — the merchant hates losing too

The merchant asks first. Do you lock the door? A spare chest? A plan?No three-check doorkeeper, no spare chest far away, no plan for when a thief gets in — then no deal, or a dear one. The better-guarded the castle, the cheaper.

the thief still comesthe money comes backwhat it cannot returnthe guests' trustthe days lostlocking is our jobwhether it pays the thief's ransom differs by merchantinsurance returns money — the door is still ours to lock

Insurance returns money. The door is still ours to lock.Insurance hands the risk to the merchant; it does not make the risk go away. Whether it also pays the ransom to the thief differs by merchant.

In one breath

Cyber insurance = a promise to pay a little now and get a lot back if robbed. The merchant asks first whether you lock the door, and a well-guarded castle pays less. It returns money — it never locks the door for you.

A policy covering the costs of a cyber incident: response, recovery, customer notification, legal fees, fines and business interruption. Underwriting requires controls like MFA, backups and an incident response plan, and refuses or raises premiums without them. Ransom coverage and exclusions vary by insurer.

When grown-ups say it

Cyber insurance
Thief insurance. The merchant pays the cost of a break-in — in exchange for a little every month.
Risk transfer
Handing the risk to the merchant. The risk is moved, not removed. → the risk ledger
Coverage
What goes in the sack. Fixing, telling the guests, fines, days with no trade — the promise says how far it goes.
Exclusions
What stays out of the sack. Robbed with the door left open? Not covered. Nor war, old known holes, or false answers.
Underwriting
The merchant's checklist. Asks first about the doorkeeper, the spare chest, the plan and the carpenter. → the doorkeeper who checks three times
The ransom debate
Money paid to the thief. If the merchant pays ransoms, more thieves may come — so goes the worry. → the thief's lock on every chest
Incident response costs
The cost of working the plan. Outside watchmen, nights of work, the price of letters. → the plan for when a thief gets in
Premium
The monthly coins. A well-guarded castle pays little, a careless one pays a lot — or cannot buy in at all.
Next story
Three Things to Keep: No Peeking, No Tampering, Always There →
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