Virtual is the new way of life. Individuals as well as corporations have moved online for even the most basic activities, whether it is news, entertainment, health, shopping, communication and exchange of information, buying and selling products and services, and financial transactions including money transfers, investment, and banking. But we need to ask ourselves – how safe is the cyber world? What are the risks we face on a daily basis when we are online? What is the current propensity of cyber fraud in India, and do we really need Cyber Insurance? Or is this a western fad that we can bypass? Read on to know more.
Importance of Cyber Insurance in India
Digitalization has entered all facets of our lives. Indian corporations are adopting technology in all their operations at lightning speed. And why not- its helping in streamlining processes, driving performance, reducing transaction time and improving productivity. However as they say, everything comes with a price. In the case of technology, it is the fear of online data theft and other such cybercrimes. A recent cyber risk survey (Allianz Risk Barometer 2019) highlighted that cyber issues comprise the topmost risk faced by India Inc., much in excess of conventional risks such as regulatory changes, market developments, increasing competition etc.
Symantec, a global cybersecurity leader reported that India has witnessed a 457% growth in cybercrime in the last half-decade. In the period between 2016 and 2018, globally India ranked second in the list of nations most affected by cybercrime and such related threats. All these factors point to the dire need for cyber insurance for an entity or individual operating in India.
Growth in India
India is a new adopter of cyber insurance. However, it has made its presence felt in a very short span of time. The possible implication of GDPR and Personal Data Protection Bill has also fueled its adoption and growth.
As per a report published by DSCI (Data Security Council of India), there has been a 40% growth in the number of cyber insurance policies purchased by corporates in the country between 2017 and 2018. The same cyber insurance report was covered by the Economic Times, this highlighted that all kinds of businesses – large enterprises, small and medium enterprises alike, are today very vulnerable to cyber-crime. Similarly a December 2019 PWC-DSCI report titled “Cyber Security India Market – What Lies Beneath” corroborates that the need for cybersecurity in India is rising far faster than in other parts of the world – read for full report.
A major demand for cyber insurance is from the IT, ITES, Banking and Financial Service sector. Other industries which are showing interest include pharma, retail, manufacturing, hospitality, R&D, etc.
Here are some important facts about cyber insurance that you must know:
The cyber insurance industry is pegged to grow at 27% (CAGR) and to reach a valuation of USD 22.8 billion in the next five years. This growth rate is significantly faster than most other insurance products, indicating the growing awareness of, and need for cyber insurance among decision-making experts and users.
Typically, cyber insurance policies cover the following incidents or aspects and the resultant expenses :
- Regulatory aspects such as legal expenses,
- Costs for defence, penalties, etc.
- Liability – First party, third party as well as multimedia
- Digital theft or data breach – including expenses incurred towards breach resolution, crisis management and other mitigation activities
- Business interruption (income loss) or additional expenses due to cybercrimes including system failures or even voluntary system shutdowns as a result of a breach
- Cyber extortion
- Data recovery expenses
- Counseling treatment services
Cyber insurance policies can be purchased by individuals as well as corporations.
Cyber Insurance policies often have clauses and each clause has a sub-limit. For instance, claims related to phishing or e-mail spoofing cannot exceed a certain predetermined percentage. Alternatively, each clause can have a fixed amount, and the insured needs to bear any expenses over this amount.
Cyber Insurance does not cover bodily injuries or property damage caused as a result of a cyberattack. Also, any claims that can be traced back to unsolicited communication fraudulent conduct by the insured are excluded.
Cyber Insurance should assume critical proportion in all risk management strategies. It may not be able to safeguard your entity from hackers or cybercriminals, but it can do the next best thing – take care of financial losses or expenses in case of such eventualities.
SecureNow provides a well-selected individual and family cyber insurance policy product available to view online. You can understand the product features, coverage and exclusion items, and also the premiums payable at different levels of coverage for yourself and also buy the product from us. Further you can contact us at www.securenow.in or call at 96966 83999 should you wish to purchase this insurance for your company or firm. We can provide options from various top insurers to best meet your needs easily and swiftly.
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