Cyber insurance provides coverage to companies whether it is a startup or a well-settled organisation against cyberattacks, and ransomware breaches caused during the policy tenure. Cyber insurance provider compensates for the financial losses caused due to online fraudulent activities related to the information technology infrastructure containing customers' confidential data such as credit/debit card details, account numbers, health records, etc.Read more
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Cyber risk insurance policy is an emerging insurance for cyber attacks in the insurance market due to evolving technology and the increase in the 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 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 liability insurance provides coverage for the following condition:
|Identity Theft||The plan provides coverage for defence cost of any claim raise by affected party. Apart from this, the prosecution cost against 3rd party as well as the costs of photocopying of documents and cost of transportation to court.|
|Cyber Stalking||The plan provides coverage for the incurred cost for prosecution of a criminal case against 3rd party.|
|Malware Attack||In case of malware attack the cyber insurance provides coverage for restoration costs of the computer after the malware attack and defence cost of any raised claim by affected party for legal liability caused due to the malware.|
|IT Theft Loss||An unauthorised cyber intrusion by third-party results into a financial loss will be covered. Apart from this, prosecution cost against 3rd part responsible for IT theft loss and any legal fees for lodging a claim against payment system operator or financial institution are covered.|
|Phishing||Financial loss caused to the insured due to phishing act by third-party is covered and prosecution cost against a 3rd party is also covered.|
|Email Spoofing||Financial loss caused to the insured due to email spoofing by third-party along with the prosecution cost if you file a case against 3rd party.|
|Media Liability Claims||Defence cost of claim made by 3rd party against insured, prosecution cost for wrongful media act as well as photocopying of documents and cost of transportation to court are covered.|
|Cyber Extortion||The cyber liability insurance covers the cost incurred due to cyber extortion as well as prosecution cost against 3rd party.|
|Privacy & Data Breach by 3rd Party||Legal fees incurred by the insured in case of damages caused due to privacy and data breach is covered.|
Cyber insurance does not provide coverage for the following:
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 attacks can lead to loss of customers and sales. Similarly, companies that store customer information on their websites can purchase and get cyber coverage.
Follow the below-mentioned steps to raise a claim under cyber insurance:
Step 1: Claim intimation: Insured need to notify the insurer as soon as they become aware of any cyber incident. Some insurers have tie-ups with third-party cyber security service providers to raise the claim.
Step 2: Investigator is assigned: An investigator is assigned to the incident analysis including severity and a temporary resolution plan is chalked out. Turn around time for this is 4-5 hours tentatively.
Step 3: Cyber Expert is Hired: If the incident is severe a cyber expert is hired to do the incident analysis. This cannot be done by the in-house cyber experts to keep transparency and avoid biasedness.
Step 4: Internal liaisoning: All concerned parties engage in a discussion on the resolution including the insured. Then the insurer takes policyholder's 2nd opinion on potential costing for the loss sustained by the insured. If a cost-effective option is available, the insurer takes it. At this point, the final plan of action is drawn.
Step 5: All details are re-reported to the claiming team. The claiming team reviews all the details and considers it for a final approval post which the expense is paid out.
NOTE: It is the responsibility of the insured to not withhold any information which the insurer may deem relevant to be shared for a claim. Failure to do so may result in denial of the claim or delay.
Cybersecurity insurance is an important investment for any company looking to protect itself from the risks associated with cyber-attacks. To qualify, organizations must pass inspections by IRDAI and provide documentation about their security measures that meets government standards in order to receive coverage.
Once the security audit is completed, the insurer will tell about the insurance coverage the company is eligible 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.
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: Then 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.
Mentioned below are some of the tips to enhance cyber security and effectively prevent cyber risks under cyber crime insurance:
Ans: Any startup or a well-settled organisation looking to protect the company’s data that is stored online can purchase a cyber insurance policy.
Ans: To get better coverage in case of a cyber breach, it is recommended by the insurers to use effective cyber security measures because at the time of purchasing the cyber insurance policy. The insurer sends some of their inspectors to inspect the security measures taken by the company to safeguard their online data.
Ans: Yes, cyber insurance does provide coverage for copyright infringement or trademark infringement.
Ans: Yes, in case the date of the company’s customer gets leaked on the internet, then the insurer will provide cover for it.
Ans: Privacy risk, operational risk, service risk, and security risks are the four prominent risks that cyber liability insurance covers.
Ans: Cybersecurity insurance is an important insurance policy. It is important because it helps organizations to comply with the regulations that want a business to notify customers of the company about the cyber breach including PII. The insurance plan provides coverage for legal fees as well.
Ans: Yes, There is an insurance policy for cyber-attacks that is known as cyber security insurance. It protects your business against losses caused due to cyber attacks.
Ans: Nowadays, companies depend on data in order to operate in this digital world. The data can include sensitive information related to customers and vendors. In case of a cyberattack, cyber criminals can ask for an enormous ransom amount in exchange for stolen data. Hence, in order to provide an enormous financial cover, the sum insured amount of the cyber insurance turns out expensive.
Ans: Cyber insurance premiums can depend upon many factors such as the company’s services, type of data stored online, PII and PHI records, network security, privacy policies, annual gross revenue, how much exposed a company is and more.
Ans: Cyber insurance companies started offering first-party coverage in the mid-2000s.
Ans: The better security measures a company takes, the lower the premium amount for the opted cyber insurance plan will be.
Ans: General liability insurance provides coverage for bodily injuries or damaged properties resulting from services, operations or products whereas cyber insurance provides coverage for online cyber threats this is why cyber liability coverage is excluded from the general liability insurance policy.
Ans: As an insured, you can raise a claim for all the cyberattacks however, whether the insurer will provide cover for multiple cyber attacks will depend on the selection of coverage and sum insured that you have opted for while purchasing the insurance plan.
Ans: No, there is no sub-limit, deductible or waiting period under the cyber insurance policy.
Ans: Usually, a cyber insurance policy comes with a tenure of 1 year and the insured has to renew the policy before the expiration date to keep on getting the coverage.
Ans: Yes, you can hire a lawyer for further legal proceedings but you will have to inform the insurer as soon as the cyber attack takes place.
Ans: Yes, you can make your own plan. You can choose the kind of coverage you want, choose sum insured according to your need and if you want you add any of the add-ons available.
Ans: Floater sum insured: In floater sum insured, there is a fixed sum insured that floats over the selected sections of coverages.
Per Section: There is a separate sum insured for each selected section.
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