Every business and service is going digital currently because of digitisation. The pandemic added to it and acted as a catalyst in the digital shift, causing the entire world to go online. Everything is virtual, from money transactions to data sharing to online classes, and life cannot be imagined without the internet.
Because we rely on the internet, there is a higher risk of cyber-attacks and fraud. India is one of the countries most impacted by cybercrime. As a result, the significance of cyber insurance coverage must be balanced.
What exactly is cyber insurance?
A contract between an insurer and a company to protect against losses caused by a network-based event is known as cyber insurance. It is intended to shield businesses from the consequences of cyber-attacks. It reduces risk exposure by covering costs following a cyber-attack or security breach.
In other words, cyber insurance covers the expenses and legal fees associated with cyber breaches, including system hacking, data theft, and the loss of critical information in an organisation.
What does cyber insurance cover?
First party and third-party liabilities arising directly from a cyber security breach are covered by cyber liability insurance. It pays for costs incurred due to data breaches, cyber-attacks, human error, business disruption, and electronic media claims.
Emergency response, event management, notification, business loss, and recovery costs are all covered.
Types of cyber insurance coverage:
Insurance companies provide customised plans based on industry-specific and company-specific requirements. Plans are tailored to the buyer’s needs. The major types of cyber insurance coverages available in India are as follows:
- First-party expenses:
First-party expenses covered by cyber insurance coverage include direct financial loss, business interruption costs, mitigation costs, recovery costs, credit monitoring, system damage, and any additional costs.
- Regulatory investigation coverage:
It pays for regulatory investigations, lawyer’s fees, and administrative and GDPR expenses.
- Crisis management expenses:
These include the costs of forensic IT audits, stakeholder notification, security consultation, reputation damage coverage, coordination with service providers, credit and identity theft monitoring coverage, cyber extortion/ransomware coverage, cyber stalking, and counselling.
- Privacy and data liability claims:
These cover a company’s third-party legal liability for damages directly resulting from an error on the company’s part or a privacy, data, or security breach that may result in defamation, IPR infringement, and a lawsuit.
The RBI has issued guidelines for determining a customer’s liability in cybercrime cases.
- No liability:
A customer has no liability in the following two situations:
Fraud, negligence, or deficiency on the part of the bank, whether the transaction is reported.
- Limited liability:
The customer’s negligence causes the loss in a limited liability situation. They were sharing payment credentials, for example. The customer bears the loss until the unauthorised transaction is reported to the bank.
How do I file a claim?
In the event of a cyberattack, notify your insurer as soon as possible. It facilitates a more thorough examination of the claim process. You can inform the insurer via email, phone, or written notice, along with a copy of the FIR and other pertinent documents.
Cyber insurance for individuals:
Cyber-attacks now affect individuals as well as businesses. There have been numerous cases where cyber insurance for individuals was needed as people have suffered losses due to cyber fraud. Because everyone uses the internet for money transactions, shopping, and social media, all personal information is available online, making it vulnerable to cyber threats.
* Standard T&C Apply
** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.
# Visit the official website of IRDAI for further details.
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.