Cyber Insurance

Cyber insurance covers business liabilities caused due to online databreach or cyber attack that includes confidential information of the customers such as credit/debit card details, account numbers, health records, etc.

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What is Cyber Insurance?

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 Security Insurance

However, cyber protection 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
  • 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.

What is Cyber Insurance Coverage?

Cyber liability insurance provides coverage for the following condition:

  • Identity Theft: The plan provides coverage for defense 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 defense 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: Financia 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 inusred, 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.

What Does Cyber Insurance Not Cover?

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 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 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:

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. The Insured’s 2nd opinion is obtained about potential costing ascertained to resolve the attack. If a cost-effective option is available, the insurer takes it, however, the final plan of action is drawn at this point.

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.

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

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 in order to receive coverage that meets government standards.

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.

Cyber Insurance FAQs

Average Rating
(Based on 45 Reviews)

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Cyber Insurance Reviews & Ratings
4.5 / 5 (Based on 45 Reviews)
(Showing Newest 10 reviews)
Pinku
Surat, October 04, 2022
Paperless Process
We bought the contractual liability insurance from policybazaar and received the best overall package. The process was paperless as we applied for insurance online and the support was amazing.
Pinku
Surat, October 04, 2022
Paperless Process
We bought the contractual liability insurance from policybazaar and received the best overall package. The process was paperless as we applied for insurance online and the support was amazing.
Aashish
Ahemdabad, October 03, 2022
Extensive Coverage
We thoroughly checked all the benefits and features and decided to buy a contractual liability policy from Policybazaar. It provides all the necessary features to safeguard our business against any loss.
Aashish
Ahemdabad, October 03, 2022
Extensive Coverage
We thoroughly checked all the benefits and features and decided to buy a contractual liability policy from Policybazaar. It provides all the necessary features to safeguard our business against any loss.
Nishant
Udaipur, October 02, 2022
Easy to Buy
It was easy to buy insurance from Policybazaar and customer support was also amazing to clear all the doubts. Contractual liability insurance is essential for my business and I could not get a better deal than this.
Nishant
Udaipur, October 02, 2022
Easy to Buy
It was easy to buy insurance from Policybazaar and customer support was also amazing to clear all the doubts. Contractual liability insurance is essential for my business and I could not get a better deal than this.
Puneet
Assam, October 01, 2022
Easy plan comparision
An ideal Contractual Liability Insurance policy purchased to protect our business that we ecounter in our everyday operations. Policybazaar offers a platform to compare multiple plans.
Puneet
Assam, October 01, 2022
Easy plan comparision
An ideal Contractual Liability Insurance policy purchased to protect our business that we ecounter in our everyday operations. Policybazaar offers a platform to compare multiple plans.
Govind
Jharkhand, September 30, 2022
No broker and paper work
Great experience at Policybazaar. We did not know that buying Contractual Liability Insurance could be that easy. Also there is no broker and paperwork.
Govind
Jharkhand, September 30, 2022
No broker and paper work
Great experience at Policybazaar. We did not know that buying Contractual Liability Insurance could be that easy. Also there is no broker and paperwork.
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