Does Cyber Insurance Cover System Failure?
Sometimes—some cyber policies cover a defined system failure even without an attack, but hardware, maintenance, utility, and known-defect exclusions may apply.
Some policies include a system-failure trigger; others focus on security incidents or define covered failures narrowly. Chubb describes interruption to insured systems in its product, but that company-specific summary does not establish that any outage is insured. A vendor system may also be treated under a separate dependent-business-interruption section.
Read the system-failure and security-event definitions together. Check exclusions for hardware breakdown, maintenance, utility interruption, prior known defects, or failure to patch, and see whether the policy requires an external cause. Note the waiting period, dependent-system wording, sublimit, and proof of lost income. Ask the insurer how the exact type of failure you depend on would be classified before choosing a limit.
Give the Insurer a Specific Outage Scenario
Describe the system, who operates it, what failed, how long the outage lasted and which revenue stopped. Ask the broker to identify the trigger, exclusion, waiting period and limit that apply to that scenario. The FTC lists lost income among first-party cyber costs to discuss; it does not say every interruption qualifies. FTC cyber insurance guidance.
Keep the outage timeline, incident findings and income records needed to explain the loss. Compare the full cyber insurance guide with the separate question about cloud and AWS outages.
