A few insurance providers in India have started offering cyber insurancefor corporates as well as individuals. The risk coverage for corporates includesdata breach, investigation cost and cost of data recovery. India is getting close to technically developed countries like US and China in the number of cyber-attacks detected. Massive incidents of data theft and fraudulent financial transactions are some of the top risks in India. Insurance companies face a challenge in responding quickly and providing cover to most risks. One leading Insurance provider covers around 11 risks associated with individual cyber insurance policies. Most of such demands for cyber insurance come up after people fall preyto such incidents resulting in financial losses, though, recent malware attacks have alarmed many, making them look for insurance cover.
Importance of Cyber Insurance
The need for cyber security arises on account of virus attacks on systems that hold personal data of clients with banks, call centres. Any storage device that may have data of individuals like the Aadhar authority, stock exchanges or broking firms also fall victim. Most such enterprises have high grade security firewalls but smart and perverted hackers enjoy the thrill of breakinginto such high security systems to steal data that could be used to embarrass governments (wiki leaks) and large corporates (Facebook). They also target individual bank accounts to siphon money. Most banks deny admitting a failure and do not make good the monetary loss suffered by an account holder. However, some recent consumer court judgements have pointed out the issue of negligence due to poor security framework of the bank and awarded huge pay-outs to suffering account holders. Now Banks have tightened their security features and insured against such hacker loss. They even sent out periodical advisory to individuals warning them to exercise caution with frequent change of passwords, not sharing personal information with anyone etc. Individuals who have been subject to monetary loss due to cyber-crime, phishing as well as unauthorized withdrawals are now considering insurance for themselves against such losses.
Cyber Insurance Coverage
These policies cover expenses related to post attack actions such as cost incurred during prosecution process and defence costs during a trial. Other losses related tohacking a bank account,leading to online loss of money also get covered subject to various limits based on individuals.These policies also take care of consultant fees,court expenses and legal feesas a result of these cyber-attacks.Insurers are smart enough not to cover any claim if the attack is deliberate and intentionally done. Insurers do not cover any fraudulent,dishonest or malicious act.They also do not cover loss of personal data or lost pictures as these are difficult to put a value on. The insured are expected to follow standard preventive measures against cyber-crimes by installing anti-virus, correct use of passwords etc. The sum insured ranges fromRs. 1 lac to a crore with comparative increase in premium, going up to Rs.9000for a substantial cover.And there are limits to cover each risk, ranging from 10 to 25% based on the type of loss, the highest amount being for theft, phishing and IT attacks.
With increased activities on the Internet, not many users are familiar with the preventive steps needed to protect their interests.This could put the individual at high risk of cyber-crime. The cyber insurance policy covers a lot of issues related to cyber-attacks and may be agood optionfor those very active on the internet.
