What is the primary purpose of “data breach insurance”?

The primary purpose of data breach insurance is to cover costs associated with data breach incidents, including legal fees and customer notifications. In today's digital age, businesses increasingly store sensitive customer information, such as personal data and financial records. When a data breach occurs, it can lead to significant consequences, including legal liabilities, regulatory fines, and damage to the company's reputation.

Data breach insurance specifically addresses these challenges by helping businesses manage the financial fallout from such incidents. Coverage can encompass expenses related to investigating the breach, legal consultations, notifying affected customers about the breach, and providing credit monitoring services to those impacted.

The other options, while related to various aspects of insurance, do not align with the specific focus of data breach insurance. Protecting physical assets, insuring against loss of equipment, and providing general liability coverage address different types of risks that businesses face, but they do not encompass the unique needs and expenses that arise from a data breach incident.