Cyber Insurance

Cybersecurity insurance also known as cyber insurance or cyber liability insurance is a contract that an organization can purchase to help decrease the financial risks related to online business. The insured can get cyber coverage by paying monthly, quarterly, half-yearly and yearly premiums to the insurance company.

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What is Cyber Security Insurance?

Cybersecurity insurance is an emerging insurance plan in the insurance market due to evolving technology and the increase in usage of online services by almost every organization or business. Given the fluctuating nature of cyber risks in the market, the insured can enhance the coverage as per their requirements.

Cyber Security Insurance

However, cybersecurity insurance has its origins in errors and omissions insurance which is a separate kind of insurance plan that provides coverage against any faults & defects in the services an organization provides. Some cyber insurance policies offer different E&O coverage and many insurance companies offer these plans separately to avoid any kind of confusion regarding coverage.

Features and Benefits of Cyber Insurance

The main features and benefits of a cyber insurance policy are mentioned below:

  • Protection against cyber threats and cyber crimes
  • Financial cost coverage
  • Safeguards big and small organizations from crippling down due to the damage caused by a cyber-attack
  • Ensures cyber safety and security
  • Easy online purchase facility

Why Cyber Risk Insurance is Important?

Cyber risk insurance becomes a necessity as various organizations rely on Internet-based technology to reach out to their prospective customers and pursue their digital marketing goals. All digital tools expose these organizations to the risk of cyber threats.

Cyber insurance for corporates protects the company from the loss caused to first-party and third-party liabilities resulting from cyber-attacks and leading to financial & reputational losses. It offers insurance protection to corporations against cyber extortion, unauthorized access, data breaches, etc. to secure sensitive customer personal information and employee data.

Since data security is one of the primary responsibilities of companies as they have access to their customers’/users’ confidential information. It becomes a priority for the Small and mid-size companies that are struggling to grow in the market should purchase this policy to protect their customer information.

For example, Sony’s PlayStation Network was breached in 2011. In this cyber breach, personally identifiable information of over 77 million user account were compromised. After this breach, PlayStation users were not able to access the online services and it lasted for 23 days. Sony had to face a loss of around $171 million and since Sony did not have cyber insurance in place they could not get any kind of coverage. The issue was taken to the court and the court ruled out that the insurance plan that Sony had only covered the physical property damage only.

Cyber Insurance Inclusions

Here are the following cyber insurance coverage provided under cyber insurance in case of any cyber event:

  • Identity Theft: The plan covers losses caused by identity theft as well as lost wages, expenses due to refiling of rejected loan applications, costs of not arising affidavits and other legal and financial documentation expenses etc.
  • Cyber Extortion: The plan will cover expenses incurred during the prevention of a cyber incidents, threat, for restoring data, forensics and the cost of hiring an IT security consultant to manage the threat
  • Legal Expenses: Consultation fees with a lawyer up to the mentioned sum, costs incurred due to a false criminal charge against your company or while defending or pursuing legal actions are covered
  • Unauthorized Transactions: In case you incur financial loss due to a transaction not made by you, the plan will reimburse you.
  • Data Restoration Costs: The insurer will cover costs for data restoration due to any cyber threat, extortion, etc. to your computer system, given it was reported within 30 days.
  • Cyberbullying: In case of harassment, intimidation, invasion of privacy, character defamation, etc. the insurer will cover the cost of psychologist consultation, rest and recuperation costs and expenses for temporary relocation if required
  • Malware Intrusions: In case of data loss or damage or any lost wages due to corruption, the insurer will cover the costs of restoring data.
  • Consequential Losses: Penalty for missing an EMI payment on the loan or penalties imposed by any financial organisation for not maintaining a minimum balance will be covered.

Cyber Insurance Exclusions

Cyber insurance does not provide cover for the following:

  • Bodily injury, diseases, death or damage to any tangible item is not covered
  • Electric disturbance, mechanical failure, breakdown of any kind or media failure that led to any kind of loss is not covered
  • Any circumstances or prior notice of the last insurance provider is not covered
  • Any valuable information possessed by any insured person except the CEO, COO, CFO is imputed by the company
  • Any willful or fraudulent act of any law, rules or regulation by an insured
  • Damages caused due to negligence or lack of precautions to safeguard information such as credit and debit cards, bank accounts, internet connections etc.
  • Deliberately ignoring any knowledge or circumstances that may become a basis of a claim
  • Ongoing legal proceedings from before the policy was purchased
  • Unexplained loss, or any loss due to a government order
  • Losses due to participating in any malicious or dishonest activity
  • Breach of trade secrets, trademarks, registered patents, actual or alleged plagiarism, copyrights or other intellectual property are not covered
  • Consequential loss or damage is not covered, including the loss suffered by any third party
  • Any legally uninsurable matter
  • Loss in value, theft or disappearance of cryptocurrency is not covered
  • Loss of any tangible property is not covered

Purchase of sovereign funds, dealing in securities, federal fund, foreign exchange, currencies and commodities are not covered

Who Needs Cybersecurity Insurance?

Businesses and organizations that have data stored online whether it is their customer’s data such as credit/debit card details, PII, contact numbers, email IDs or their own confidential data are suggested to purchase cyber liability insurance. 

A cyber insurance plan is beneficial for e-commerce businesses as cyber breaches can cause loss of customers and sales. Similarly, companies that store customer information on their websites can purchase and benefit from cyber coverage.

How to Raise a Claim Under Cyber Insurance?

Follow the below-mentioned steps to raise a claim under cyber insurance:

  • Inform Insurer: Inform your insurer as soon as the cyber attack takes place.
  • Keep Documents Ready: Make sure to get your documents ready for a quicker claiming process.
  • Fill-in Form: Ask your insurer for a claim form, fill it up and submit it along with the required documents.
  • Inspection: Insurer will send a few inspectors to check the authenticity of the raised claim.
  • Compensation: Once the inspection is done, the insurance company will provide compensation as per the sum insured amount.

How to Choose Cybersecurity Insurance & How Much Does It Cost?

Cybersecurity insurance cost is defined by the organization’s annual revenue. To be able to qualify for the coverage, the organization must pass the security audit performed by the insurance company’s inspectors and provide the required documents with an assessment tool that is offered by the Insurance Regulatory & Development Authority of India (IRDAI). 

Once the security audit is completed, the insurer will tell about the insurance coverage the company is elgible for along with the premium amount that the organization will have to pay for it. Since the concept of cyber insurance is new and companies have recently started adopting it, the premium amount varies from one company to another.

How to Renew Cyber Insurance?

To renew your cyber security insurance coverage, follow the below-mentioned steps.

  • Step 1: Visit the Policybazaar Insurance Brokers Private Limited website.
  • Step 2: Fill in your policy number to access your account.
  • Step 3: Now locate the “Renew” button on the website page.
  • Step 4: You can also add or remove any add-on as per your requirement before renewing your cyber insurance plan.
  • Step 5: The premium amount will fluctuate as per your addition or removal of the add-on.
  • Step 6: Now click on the “Renew” button.
  • Step 7: Now you can make the payment using debit/credit card, UPI or net banking as per your convenience.
  • Step 8: Once the payment is completed, the insurer will send the updated policy documents to your registered email ID and a hard copy to your registered address.

To avoid the cancellation of the policy, make sure to renew your cyber security insurance on time.

Tips to Enhance Cyber Security

Mentioned below are some of the tips to enhance cyber security and effectively prevent cyber risks under cyber crime insurance:

  • Follow effective cyber security measures. Instantaneously respond to threats and stop it then and there with an appropriate anti-malware.
  • Allocate cyber insurance costs in your company’s budget.
  • Enhance cyber security expertise and take measures to bolster security.
  • Ensure security and productivity by providing employees with devices that they know how to operate and function.
  • Boost security measures with an adequate cyber insurance policy to ensure smooth business operations.

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Cyber Insurance Reviews & Ratings
4.5 / 5 (Based on 28 Reviews)
(Showing Newest 10 reviews)
Nagpur, March 13, 2022
Insurance came handy
A client s confidence was compromised by one of our workers. Our insurance policy, which includes coverage for this, came in handy in this scenario.
Chandigarh, March 11, 2022
Covered the restoration charges
We might have suffered significant damages as a result of a speculative loss of data. Our insurance policy saved us from a financial disaster by covering the restoration charges.
Hamirpur, March 09, 2022
Covered losses and additional counselling
In our firm, we reported an incidence of cyberbullying. It was a horrible situation. Loss coverage was issued by the insurer, as well as additional counselling.
Ludhiana, March 07, 2022
Paid damages thanks to the insurance
A virus in the system that caused some of the system s files to become compromised. Even though we detected it in time, there were evident losses. We were able to pay for the damages thanks to the insurance.
Mysore, March 05, 2022
Cyberbullying insurance
We reporrted a case of cyberbullying in our company. It was unfortunate. Insurer provided coverage for losses and further counselling.
Shimla, March 03, 2022
Coverage for malware attack
We had a mishap situation where a malware corrupted some of the files in the sysytem. There were obvious losses even though we caught it on time. The insurance helped us pay fo the damages.
Varanasi, March 01, 2022
Reimbursement for unauthorised transaction
During the lockdown, we had an unauthorised transaction, a huge amount at that. We quickly reported it to the bank, police and our insurere. We were reimbursed the amount.
Manalore, February 27, 2022
Finances for legalities
One of our employees had an identty theft issue when our firewall were breached. Our insurnace covered up the finaces for all the legalities and correction procedures.
Ujjain, February 25, 2022
Restoration cost covered
We recently had to restore a lot of our lost data. We had insurnace for it which provided us with the cost coverage.
Manalore, February 23, 2022
Cyberbullying coverage
We recently bought this one extremely crucial insurance of cyberbullying. It covers the expenses for psychological consultation and recueration. We are happy with the purchase.