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Insurance Article

What Is Cyber Insurance And Why Is It Required?

March 08 2018
Cyber Liability Insurance

Cyber-attacks and sensitive data breach can be detrimental for business and the reputation of an organization

According to the Norton Cyber Security Insights report, at least 49% of India’s population that uses the internet are affected by cybercrime. The report also suggested that there is a cybercrime taking place every 10 minutes in the country. The Computer Emergency Response Team reported 27,482 cybercrime cases in the first half of last year.

With more focus on digitization of banks and cashless economy, cyber risk have also emerged as one of the leading threats in India. These include phishing, scanning or probing, site intrusions, ransomware, identity theft, and private data breach etc. With more Indians going online, cyber experts believe there should be a critical infrastructure to predict and prevent cybercrimes.

What Is A Cyber Insurance?

It’s not just the large organizations that are susceptible to being hacked by a cyber-attack. Almost 60% of small business have experienced data breach that can damage the organization’s reputation and put the business and employees at risk. A cyber insurance provides coverage against business liabilities for a cyber hack.

A cyber insurance policy is designed to mitigate risk in case of a cyber-attack or phishing attempt that can breach sensitive data such as credit card details, account numbers, business records or social safety codes with a malicious intent.

What Does The Cyber Insurance Cover?

Besides legal fees and expenses for cyber security, cyber insurance can help you with the following.

  • Notifying you about potential cyber-attack and data breach
  • Restoring personal identities in case you are affected
  • Cost of recovering lost data and replacing the compromised data
  • Expenses incurred for repairing damaged computer systems
  • Monitoring and protecting against damages caused by a virus attack

Need For Cyber Insurance

Today, cyber risk is one of the most discussed topic in board rooms. The threat of cybercrimes is on the rise at a much faster pace and the nature of risk is far more dynamic and possibly devastating in many situations. Cyber-attacks and breaches like the one called “WannaCry” which affected around 2.5 lakh computers can be detrimental.

It stands a reason to protect and minimize the risk of these data breach through a cyber liability insurance. In fact, around 70% of the companies have transferred the risk of cyber-attack to a third-party insurance company. The demand for cyber insurance cover have increased by 50% in the last year with top companies including some of the state-run banks buying it.

Related Article:

Demand for Cyber Insurance Rises as Cashless Transactions Increase
The Importance of Business Insurance for Startups

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