A midsize corporation is considering purchase of Cyber Liability Insurance Policy The following table provides the probability distribution of yearly cost coverage associated with different level of Cyber Security IT network interruptions for this corporation Type of Risks Probability Cost Coverage None 0 90 $0 Minor A (Loss or Damage to Electronic Data) 0 040 $100,000 Moderate A B ( Loss of Income and Extra Expenses 0 03 $1,000,000 Major A B C (Cyber Extortion) 0 018 $2,500,000 Catastrophic A B C D (loss of reputation credit monitoring of all affected) 0 002 $15,000,000 What is the expected cost of this policy for the insurance company What is the Standard deviation of cost Hint Use Excel If the yearly cost of purchasing a network interruption insurance is $125,000, calculate the expected gain or loss for a corporation that purchase this insurance Would you recommend purchasing this insurance Why Would you a buy this insurance policy at cost of $100,000 Why

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A midsize corporation is considering purchase of Cyber Liability Insurance Policy. The following table provides the probability distribution of yearly cost coverage associated with different

A midsize corporation is considering purchase of Cyber Liability Insurance Policy. The following table provides the probability distribution of yearly cost coverage associated with different level of Cyber Security IT network interruptions for this corporation.

Type of Risks	Probability	Cost Coverage
None	0.90	$0
Minor: A: (Loss or Damage to Electronic Data)	0.040	$100,000
Moderate: A + B (Loss of Income and Extra Expenses	0.03	$1,000,000
Major: A+B+ C (Cyber Extortion)	0.018	$2,500,000
Catastrophic: A+B+C+D (loss of reputation & credit monitoring of all affected)	0.002	$15,000,000

What is the expected cost of this policy for the insurance company? What is the Standard deviation of cost? Hint: Use Excel.

If the yearly cost of purchasing a network interruption insurance is $125,000, calculate the expected gain or loss for a corporation that purchase this insurance. Would you recommend purchasing this insurance? Why?