The Internet has become our second world where we are spending more and more time doing lots of activities. We are unknown of the risk associated with our actions on the internet. Every act on the internet is recorded and stored on the servers. The amount of behavioral data we are generating on the internet is huge and are exposed to cyber attacks. So to secure yourself against any cyber attack there is a new product called cyber insurance.
No matter the size or scale of your business, a data breach is inevitable.
In May 2017, WannaCry ransomware attack is estimated to have impacted more than 230000 computers across 150 countries in just one day. I remember the banks and other financial companies have asked their customers to NOT to do any online financial transactions till further notice from their side. Here is the screenshot of the ransom note left on an infected computer.
India was the third most affected country under WannaCry cyber attack. A few months back, Zomato and Uber also faced data breached issues. So now these companies have understood the importance of the cybersecurity and its impact on their business and brand image.
The concept of cyber insurance is still in its childhood as far as India is concerned. It is prevailing in the western world for now almost ten years.
What is Cyber Insurance?
Cyber-insurance is an insurance product used to protect businesses and individual users from Internet-based risks, and more generally from risks relating to information technology infrastructure and activities. Cyber insurance covers the losses against cyber attack or data breach incident. Mostly banks and e-commerce companies have been buying this insurance. It covers the losses against data destruction, extortion, theft, hacking and denial of service. The insurance indemnifying the companies for losses against such attacks.
Do you know what coverages are usually included in the cyber insurance policy? It is no different than the other insurance policies which can cover the lost sales due to business interruption and cost of notifying the customers if there is any breach. Below are the types of cyber insurance which are covered by the policy.
- Theft and fraud – Policy covers the destruction or loss of the business data as a result of the criminal or fraudulent cyber event.
- Hacking – Insurance against cyber attack and hacking attack
- Ransomware – Provides coverage for the cost associated with the extortion by the cyber attacks which threaten to obtain and disclose sensitive data/information.
- Business Interruption – Protection against the lost income due to an interruption in the business because of cyber attack or data loss.
- Digital asset – Covers the losses incurred due to the direct result of damage, theft, misuse of electronic data.
- Cyber terrorism – Provides coverage for income loss, service interruption, failure of the computer system caused by an act of terrorism.
Cyber Insurance market in India
As I mentioned above, cyber insurance is a newborn baby in India. But the growth of the industry is more than 50% YOY. Last year the industry has grown by 50%. The industry is expected to reach Rs. 400 crore in next 2 years. Insurance companies providing cover from Rs. 1 lakh to 1 crore.
Cyber Insurance providers in India
There are many insurance companies which provide cyber insurance cover in India. Among them, HDFC Ergo, Bajaj Alliance, and Tata AIG are the leading one. Let’s check them out one by one.
HDFC Ergo cyber Insurance
Policy Name: Cyber security
Eligibility: Business and company can opt for this insurance. They need to provide past cyber attack instance, lost history and security information.
The policy is design to protect commercial businesses against the liability occurred out of cybercrime.
Features of the scheme:
- It covers both first and third party cybercrime expenses.
- Protect against business networks like LAN/WAN, laptop, hard disk, backups and mobile devices.
- Covers fraudulent activities done by an employee.
- Covers outsourced data processing and storage services.
- Cyber hacking and cyber attacks are covered.
Bajaj Allianz Cyber Insurance
Policy Name: Bajaj Allianz Individual Cyber Safe Insurance Policy
Eligibility: Any individual person above 18 years of age.
Features of the scheme:
- Defense costs as a result of any claim by an affected party.
- Prosecution costs against a Third party for identity theft.
- Financial Loss due to IT Theft.
- Restoration costs of the Insured’s computer system due to damage caused by Malware.
- Cyber extortion loss that the insured incurs due to a result of Cyber Extortion Threat.
Tata AIG Cyber Insurance
Policy Name: Tata AIG Cyber Risk Protector
Eligibility: Any individual person above 18 years of age.
Features of the scheme:
- Covers loss of personal information.
- Network security breach.
- Multimedia liability
- Financial data loss.
- Cyber extortion.
- ATM robbery.
- Lost wallet.
Why should you take cyber insurance policy?
With the increasing use of the internet, we are more exposed to the threat of the cyber attack. This insurance is available for individual as well as for businesses. If you are an individual and think you have lots of online assets, you should go for it. For business it’s must have insurance as their online presence expanding day by day.
You must know that cyber insurance is not a replacement for cybersecurity. You must have an adequate suite of security tools in place like antivirus, firewall, data encryption, two-factor authentication, password policy etc.
Buying a cyber insurance gives you peace of mind. Choose the right policy which suits your requirement and you will find it worth the money with the ever-increasing cyber attacks.