Wondering why cyber insurance is essential? Several reasons contribute to the growing requirement for cyber insurance in India. In 2022, India saw a 24% rise in cybercrimes, as per data released by the National Crime Records Bureau (NCRB) in December 2023. The main motives behind these reported cyberattacks were fraud, extortion, exploitation, among others. The good news is that cyber liability insurance provides businesses coverage against damage caused by such cybercrime. Policyholders can safeguard their businesses from the financial blows that identity theft, malware, and third-party data breaches can bring.
Keep in mind India’s cyber insurance market was valued at $50-$60 million in 2023 and is expected to grow at a CAGR of 27%-30% over the next 3-5 years. This reflects the significance of such insurance for large, small, and medium businesses all across the country.
Read on to find out the meaning, types, exclusions, and claim process of cyber liability insurance.
Cyber Insurance: Meaning
With the rise of digitisation, the attack surface for businesses has increased. Cyber insurance can be of immense help to navigate the financial challenges of cyberattacks. It offers coverage for losses due to phishing, email spoofing, IT theft, data destruction, hacking, system damage, and ransom demands. The insurance financially helps in attack remediation, data recovery, recovering personal identities, and the liability for losses incurred by customers, stakeholders, and business partners.
Types of Cyber Insurances in India
Businesses and individuals can pick customised plans based on specific industry and business needs. Here’s a look at the different types and their coverage.
First-Party Expenses: This covers damages incurred solely by your business. For instance, financial loss, system damage, credit monitoring along with recovery costs, mitigation costs, and additional costs of fixing the damage. No third-party liability is insured.
Regulatory Investigation Cover: This covers lawyer fees, GDPR expenses, and the costs of investigating the cybercrime.
Crisis Management Costs: This covers counselling charges, managing cyber extortion and cyberstalking, forensic IT audits, coordination with service providers, security consultation charges, and stakeholder and customer notification expenses.
Picking a comprehensive cyber liability insurance that also covers social media liability, cyberbullying, and fund theft due to unauthorised digital transactions can keep you fully protected. All of these covers can be added on in exchange for extra premium.
Exclusions of Cyber Insurance
Weak security measures, human error, technology system improvement loopholes, legally uninsurable matters, losses due to malicious practices, loss due to a government order, prior breaches, electric disturbance or media failure causing losses, and insider attacks are not covered by cyber insurance.
Claim Process of Cyber Insurance:
The claim process is simple and quick. Follow the steps mentioned below:
Step 1: Lodge a complaint with the cyber cell department of your area.
Step 2: Inform the insurance provider within 1 to 2 working days of the incident.
Step 3: Fill the claim form online from the official website of your insurance provider.
Step 4: Submit all the relevant documents, such as FIR copy, legal notice, etc.
Step 5: Wait for the insurer to conduct the verification and investigation.
The claim settlement will be initiated within a few working days once the proofs have been found satisfactory. Meanwhile, be doubly sure that you have already disconnected your internet, disabled remote access, and installed pending security updates. Also, remember that cyber insurance can only help you after an attack. It is best to strengthen your cybersecurity strategy to keep your organisation well-protected.
