Bug Bounty is an innovative policy used to show cybersecurity vulnerabilities. These policies formalize how companies engage with ethical hackers by offering rewards in exchange for discovering and reporting flaws. As a cost-benefit analysis, this policy allows companies to control risk by outsourcing vulnerability testing to a boarder community, while lower cost of the action instead of using finances to have a full-time internal team on payroll. This review outlines how these policies have become a strategic tool, providing structure and legal clarity to hacker-company interactions. Guidelines are in place for disclosure, reward tiers, and scope of testing help with reducing misunderstandings and legal risks. The research shows that clearly defined policies attract more skilled participants and enhance trust and accountability. It is fascinating that a potential threat is transformed into a collaborative effort to find threats through this policy. The highlight of the importance of having formal rules in place to manage cybersecurity effectively while aligning with broader economic and ethical frameworks. In the end, bug bounty policies design help create a mutual benefit for companies and the cybersecurity community.