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Cyber Insurance

A vital tool in your risk management strategy and your shield against digital threats in an era of prevalent cyber-attacks.

Coverage worth

₹1 Crore

at just

₹38,000^*

annually

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50+ years of collective insurance experience

₹5,000 Cr+ of cumulative risks insured

What Is

Cyber Insurance?

A cyber insurance policy covers a broad range of risks such as credit card data leaks, data breaches, cyber-attacks, and other digital threats. Whether it's a data breach where sensitive customer information is exposed, a ransomware attack that holds your systems hostage, or a business email compromise that tricks your employees into wiring money to criminals, cyber insurance has you covered.

Also referred to as 'cyber risk insurance' or 'cyber liability insurance', this policy can help cover the costs of responding, including legal fees, public relations efforts, and notifying affected customers. It not only covers damages caused by cyber assaults on bank accounts, credit and debit cards linked to your website, but also unintentional payments made using digital wallets.

How to Spot a Cyber Attack:

File or program malfunctions

Unauthorized password changes

Appearance of unwanted software or spyware

Difficulty installing plugins

Random file scanning

Unusual toolbars on your internet browser

Persistent pop-ups while accessing the internet

Who Needs

Cyber Insurance?

According to a report by Nordlocker, small businesses with an employee base of 500 are at the highest risk of ransomware attacks, accounting for around 54 percent of total attacks between Jan ‘20 to Jul ‘22.

The top five sectors prone to cyber attacks in India are:

Information Technology

Manufacturing

Finance

Energy

Consumer services

Almost every organization in today's digital age relies on technology in their everyday operations. Customers' names, addresses, and financial information are handled by a wide range of businesses, including IT services, product corporations, e-commerce companies, finance firms, real estate brokers, online marketplaces, restaurants, and many more. All such organizations must carry cyber liability insurance to safeguard themselves against the risk of internet fraud.

What happens after a cyber security breach?

Reputation damage

A breach can harm your company's reputation, potentially leading to lost customers and decreased trust

Heavy fines

If sensitive financial information is compromised, you may face substantial fines from credit and debit card companies.

False wire transfers

Cybercriminals may attempt to make false wire transfers using your clients' online banking credentials if your computer system is hacked.

Why Get

Cyber Insurance?

There are some shocking statistics related to cyber attacks in India reported by Cisco’s report titled ‘Cybersecurity for SMBs: Asia Pacific Businesses Prepare for Digital Defense’.

74% of SMEs suffered a cyber attack in 2021.
62% of those attacked suffered a cost more than 3.5 crore.
60% of small enterprises that face a cyberattack go out of business within six months.

Such statistics push cyber security and insurance to the forefront of every business’s priorities.

Mitigating financial losses caused by cyber threats such as data breaches, system intrusions, and ransomware attacks is crucial for corporations to safeguard their operations and reputation.

Cyber insurance provides coverage for a range of costs associated with cybercrimes, including investigative charges, data restoration costs, and crisis management fees. By purchasing cyber risk insurance, corporations can ensure continued success in the face of ever-evolving cyber threats.

The Cost of not Having Cyber Fraud Insurance:

Business loss compensation to clients

Ransom fees for restoring stolen data

Cyber forensic investigation costs

Legal attorney fees

Credit monitoring expenses

Coverages & Exclusions in

Cyber Insurance

CoveragesExclusions

Cyber insurance covers a wide range of costs that may occur in a cyber-attack. Here are some of the key coverages offered by cyber insurance policies:

Legal Representation Costs

Provides policyholders with the resources necessary to hire a lawyer to represent their business in court, negotiations with regulators, and to cover the cost of any settlements or judgments.

Malware Attack

A malware attack can cause significant harm to a business's computer systems. In such case this coverage provides the resources necessary to restore the affected systems and defend any legal claims made by victims.

Identity Theft

Provides financial protection in the event of identity theft, and covers the cost of legal representation and settlements, as well as the cost of prosecuting third-party claims and other expenses related to the theft.

Cyber Intrusion Losses

Offers protection against financial losses due to cyber intrusions that result in unauthorized payments to third parties.

Phishing

Protects businesses against the unauthorized access of sensitive information and covers financial losses due to the loss of such information.

Cyberstalking

Provides protection for businesses that are stalked or harassed using electronic means, and covers the cost of legal representation in the event of a lawsuit.

Cyber Extortion

Protects businesses that are the victims of an extortion attempt that involves the use of electronic means, such as email or the internet.

Data Breach or Privacy

Provides legal expense coverage in the event of a data breach or invasion of privacy.

Computer Forensics

In the event of a data breach, the policy provides the resources necessary to hire computer forensics experts to identify the breach, control and prevent future damage, and investigate its cause and extent.

Reputational Damage

Offers resources to help mitigate the public relations consequences of a data breach and covers the cost of brand aversion for a set period following the cyber incident.

Fines and Penalties

Protects businesses from the financial penalties and fines imposed by government or regulatory bodies as a result of a cyber incident or data breach.

Extended Reporting Period

If a policy is terminated or not renewed, this coverage provides an extended period for the insured to discover and report any claims by paying an additional premium.

Cyber insurance offers many exclusions. Some of the major exclusions in the insurance policy are given below -

Email Spoofing and Phishing

Some cyber insurance policies may not provide coverage for certain types of social engineering attacks. Instead, these attacks are typically included under commercial crime insurance policies. Examples of such attacks include email spoofing and phishing.

Physical Injury, Disease, Disability, Sickness, or Death

Claims related to physical injury, disease, disability, sickness, or death are not covered under a cyber insurance policy. However, claims related to mental injury or anguish resulting from a breach of data protection law by the company are included.

Incidents/Litigations Prior to Policy Commencement

Claims arising from incidents or acts committed before the policy's start date, such as cyberstalking, IT theft loss, malware damage to computer systems, phishing and email spoofing, cyber extortion, privacy breaches, and data breaches by third parties, are not covered.

Losses or Damages Caused by War or Government Actions

This policy does not cover claims arising from war or warlike scenarios, including invasion, acts of foreign enemies, armed conflict, rebellion, revolution, civil war, government confiscation, or damage to property by authorities.

Dishonest or Improper Conduct

Claims resulting from intentional non-compliance with a ruling, fraudulent acts by the policyholder, or criminal breaches of law or regulation committed by employees, outsourcers, or partners are excluded from coverage.

Contractual Liability

Claims related to contractual and non-contractual incentives offered by the policyholder to customers or clients, such as service rebates, price reductions, credits, promotions, awards, or other incentives, are not covered under this policy.

Cyber Claims Examples

Incident 1Incident 2Incident 3

Ransomware Attack on Insured's Server

Incident

The insured experienced a ransomware attack on their server, resulting in encrypted files and a ransom note from the attackers. The insured claimed compensation for the costs of forensic investigation, credit monitoring, and business interruption.

Resolution

The insurer proactively assisted the insured in evaluating the severity of the data compromise and appointed a forensic investigator to assess and contain the threat.

About Cyber Insurance

What is the jurisdiction/territory limit of the coverage/claim?

How much cyber insurance coverage do I need?

Is email spoofing/phishing covered under cyber insurance?

What would be the out-of-pocket cost for a cyberattack without cyber insurance?

Is cyber insurance worth it for small businesses?

Are cyber insurance premiums tax deductible?

Does cyber insurance cover property damage?

Is it difficult to get cyber insurance?

How do I file a cyber insurance claim?

Is cyber insurance the same as professional liability insurance?

What is cyber security?

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View Article

This is an article by YouStory written by Palak Agarwal and published on October, 2022

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