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📋 '''Data recovery coverage''' is a specific insuring agreement or coverage grant within a [[Definition:Cyber insurance | cyber insurance]] policy that pays for the costs of restoring or recreating electronic data that has been lost, corrupted, or destroyed as a result of a covered [[Definition:Cyber incident | cyber event]]. It addresses one of the most immediate and tangible consequences of incidents such as [[Definition:Ransomware | ransomware]] attacks, malicious data destruction, or system failures: the need to return an organization's digital information to its pre-loss state so that normal operations can resume.

🔧 Under a typical policy, data recovery coverage reimburses reasonable and necessary expenses incurred to restore data from backups, re-key or reconstruct data that cannot be recovered electronically, and engage specialized [[Definition:Incident response | forensic and recovery]] vendors. The coverage is usually subject to its own [[Definition:Sub-limit | sub-limit]] and [[Definition:Deductible | deductible]], separate from other insuring agreements such as [[Definition:Business interruption | business interruption]] or [[Definition:Privacy liability | privacy liability]]. Important distinctions exist across policy forms: some wordings cover only the cost of restoring data to the last available backup, while more comprehensive forms also cover the labor-intensive recreation of data for which no backup exists. In the London market, bespoke wordings negotiated through [[Definition:Lloyd's of London | Lloyd's]] [[Definition:Lloyd's syndicate | syndicates]] may define covered costs differently than standard forms used in the U.S. admitted market, making it essential for [[Definition:Insurance broker | brokers]] to scrutinize the exact terms when placing coverage across jurisdictions.

💡 The practical value of data recovery coverage becomes evident in the claims process. When a mid-sized manufacturer's production databases are encrypted by [[Definition:Ransomware | ransomware]], or when a professional-services firm loses years of client records, the cost of data reconstruction can reach hundreds of thousands of dollars — sometimes exceeding the ransom demand itself. Without dedicated coverage, organizations would bear these costs out of pocket or attempt to fold them into general [[Definition:Property insurance | property]] or [[Definition:Business interruption | business interruption]] claims that may not respond. As [[Definition:Cyber underwriter | cyber underwriters]] have gained more [[Definition:Loss history | claims experience]], they have refined data recovery coverage to align with the realities of modern IT environments, including cloud-based data, hybrid architectures, and [[Definition:Third-party service provider | third-party service provider]] dependencies. This refinement makes the coverage an increasingly precise and valuable component of a well-structured cyber program.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Data recovery]]
* [[Definition:Data restoration]]
* [[Definition:Cyber insurance]]
* [[Definition:Ransomware]]
* [[Definition:Business interruption]]
* [[Definition:Sub-limit]]
{{Div col end}}

Definition:Data recovery coverage - Revision history

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