Digitisation has brought numerous benefits for both individuals and businesses. The only catch is that it has also spurred the growth of cybercrime. In fact, financial fraud accounted for 75% of cybercrimes between January 2020 to June 2023. Zomato had once faced a severe security breach that resulted in the data of 17 million users being stolen.
Studies show that businesses in India faced an average of 2,108 weekly attacks in the first quarter of 2023 alone, an 18% rise from the same period in 2022. Businesses typically fall victim to data breaches, identity thefts, phishing, and reputational damage. The consequences of such incidents can be catastrophic but there is good news. You can protect yourself against such eventualities with cyber insurance.
Benefits of Cyber Insurance in India
Cyber insurance benefits the insured business in the event of an unauthorised cyber intrusion by offering cover for:
Incurred prosecution costs of a criminal case (cyberstalking) against a third party
Restoration expenses after a malware or ransomware attack
Financial loss due to IT theft, including legal charges
Defence costs claimed by a third party against the policyholder
Expenses of cyber extortion and related incidents
Financial loss associated with email spoofing
Apart from protecting your business with this insurance, make sure you also create awareness among your customers and partners of the security measures your organisation undertakes. This helps build trust for the brand. After all, cyber insurance is not a replacement for robust risk management policies.
Exclusions of Cyber Insurance for Businesses
Apart from understanding the coverage, it is also important to know what a standard policy does not cover. This can help you ensure alternate financial arrangements beforehand. Some of the common exclusions are:
Physical injuries or damage to tangible products
Attacks due to poor security infrastructure
Insider cyberattacks, which means by employees
Intentional fraudulent act by the insured individual
Further, loss of cryptocurrency value, foreign exchange, pre-existing vulnerabilities, and technological improvements to a business are not covered.
Types of Cyber Insurance Policies
Various types of policies are available in India, so that you can pick a plan that best suits your specific industry or business needs.
First-Party Insurance: This covers immediate response costs of business interruption, recovery, mitigation, and system damage and related additional expenses.
Regulatory Investigation: This covers lawyer’s fees and investigation costs.
Crisis Management: This covers the costs of security consultation, cyber extortion, and reputational damage.
Professional Liability: This covers third-party legal liability and includes privacy breaches like intellectual property infringement or violation of personal information and account numbers.
Businesses must understand the significance of cyber threats and dedicate a proper budget for cybersecurity. Cyber insurance is an excellent tool that must be included in the risk management strategy to further minimise the impact of cybercrime.
In 2022, more than 65,000 cybercrime incidents were reported in India. So, while doing digitization of your business is great, it is necessary to protect the organisation with insurance to cover the costs of malicious attacks. Compare multiple policies to understand what they cover before finalising one.
