Although cyber insurance is a new player in the market, for a country like India, which prides itself as a software exporter, it is quite essential for the businesses. With the growing use of internet and utilization of online services, it is a mandate to use safer measures to stay safe from cyber-crimes. As all the industries these days maintain their data online and use online payment gateways for most of their work, it becomes necessary to safeguard against online frauds and other threats.
Whether it is data or transaction, everything should be provided with adequate security measures. Even though new applications are being designed everyday to make online experiences safer than ever, cyber Insurance will be needed to safeguard against any eventuality.
The threat and insurance requirements vary between different organizations. E-commerce companies where financial dealings take place are the most susceptible. Websites that need passwords or which amass organization’s data are also mainly vulnerable to data theft.
Source: PWC Report on Cyber Security in India
4 General Features of Cyber Risk Insurance Available in India:
- Damage to the Business
Any financial loss due to theft of data, loss of communications, threat or vandalism discovered within the policy period. This is also referred to as restoration cost, which may involve, data and or systems affected by the attack.
- Loss due to Interruption in Business Activity
The Policy also covers loss of business income and expenses incurred to restart the business activities after a cyber-attack.This is a significant add-on given that the organizations in this country have been only second most vulnerable to cyber-attacks.
- Third Party Liabilities
Many companies involved in e-commerce activities save the user information including their financial information which is susceptible to cyber-crimes. Any third party liabilities arising from the loss of this data is covered by the cyber liability clause of the policy. Separate cyber liability policy can also be taken to cover only the third party liabilities of the firm.
- Legal Expenses
The insurer will also provide for the legal defense cost of the covered losses under the policy. These costs are the first to be paid to the insured in case a data theft or security breach is detected. However, the insurer can release overall expenses which may also include expenses for non-covered losses. In such case, these additional expenditures must be returned to the insurer.
Some General Exclusions
- Former Period Prohibition
Similar to other professional liability policies cyber liability policy also has a retroactive date. Any claim can be addressed by the insurer if arising after the retroactive date. Claims linked to a phase before the retroactive dates are excluded. Also, if there is any break in the policy renewal, then the retroactive date is updated to the date of commencement of the new policy.
- Popular Problems
If any claim arises because of any common problem already prevailing in the society, then they are excluded. The insurer does a thorough research to find out the exact situation.
- Bad Security Policies
It is a mandate for any organization to maintain all the safety processes and to have proper policies in place. If any issues occur because of the poor policies, then those claims may not be considered by the insurer.
These are some of the prominent and shared features and exclusions. However, different policy providers offer different benefits, and the exclusions might differ in various cases as well. The premiums and advantages of different policies may vary widely based on the features and the organization. Therefore, it is better to understand the safety requirement and assess the insurance need for your organization before proposing the cyber policy.
One of the best ways to find the perfect fit for your needs is by connecting to a broker or visiting a web portal that allows you to compare policies from different insurers. SecureNow has the expertise and web portal to assist you in comparing and selecting the best scheme.
Online Insurance providers not only provide the ease of opting for the policy online but also provide some additional benefits like easy processing and extra support.