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The world is more interconnected than it was a few decades back. Computers have made the work of the common man and the organizations easy and efficient. Rarely any work can be thought of being done without the help of computers and the dependency is ever increasing. There are always two sides to a coin and where there are so many advantages of cyberspace, how can the criminals be left behind in their designs to carry out their nefarious acts?
Data breaches have increased over the years affecting individuals, businesses, and large organizations. Cyber insurance covers a business liability for the data breach of customer information. It protects businesses from ransomware and spyware attacks and mitigates risk exposure by covering the costs involved after a security breach is reported. Cyber insurance covers the fees, expenses, and legal costs involved in cyber breaches.
What are the types of Cyber Insurance?
Cyber insurance is of the following types-
Individual cyber security insurance-
The individual cyber security insurance covers malware attacks, phishing, data breach, identity theft, and social media liability. It is for daily online users and can also include counseling services where an individual undergoes emotional disturbance due to cyberbullying. It extends coverage to the items on the home network that are also operated by family members.
Cyber liability insurance-
Cyber liability insurance covers the cyber risks linked to the IT firms that store customers’ personal data on the servers.
What can the Cyber Security Insurance cover?
A data breach is an incident where the data is stolen from a system without the knowledge of the system’s owner. The insurance covers emergency response costs, notification and monitoring, and recovery costs. In the case of claims, it covers damages, defense costs, and investigations costs.
This is the use or deletion of personal data on the computer. The insurance covers the cost of transportation to the court and the persecution cost whenever a case is filed against a third party.
Due to the ensuing cyber-attack, the insurance covers emergency response costs, event management costs, the funds diverted, and their recovery costs. In the case of claims, it covers damages, defense costs, and investigation costs.
Social media liability-
This occurs due to identity theft occurring on the social media account. The insurance covers the cost of transportation to the court and the persecution cost whenever a case is filed against a third party.
This is unauthorized access to passwords, usernames, and credit card details. The insurance covers the financial loss due to the loss of important information and the prosecution costs associated with it.
This attack happens through file transfer, downloaded programs, or malicious activities on digital devices. The insurance covers the restoration cost of the digital device and the cost of transportation to court.
A person gets reimbursed for the financial loss due to the transaction not made by them.
It covers financial loss due to spoofed e-mail attacks and includes expenses to prosecute the people who have carried out the attack.
The cyber insurance plans have to be renewed annually, cover multiple devices and have the option to include a family that generally includes parents and two children. The cover size that a person takes has to consider the data and money involved and how much can a person lose. The persons at a higher risk and involving a large number of monetary transactions need a higher insurance cover.
The exclusions under the cyber insurance policy-
The insurance companies provide details on the coverage and the exclusions under a policy in the policy document. An individual should be aware of the details so as not to be surprised at a later date. The exclusions under the cyber liability insurance are-
- If a person is dishonest while filling the proposal form and has deliberately hidden information from the insurance company the company would not assess the loss. When a loss is carried out intentionally the company would not cover the loss.
- In an investigation, if it is found out that the loss has been due to racist or pornographic activity the loss would not be covered.
- The policy does not cover injury, sickness, disease, or death of a person. The destruction of a property is also not covered.
Cyber insurance claim process-
The process for the cyber insurance claim is to submit in writing, within 90 days of the loss along with the required evidence. An FIR will also have to be registered with the police cyber cell. An investigator from the company will verify the claim and if it is found according to the policy compensation will be paid. The documents that are generally required are the claim form, forensic report, and details and evidence of the loss like the dates, circumstances, and the people involved. The claim settlement process can take from twenty days to a few months.
Some of the companies providing cyber insurance coverage in India are HDFC Ergo, Tata AIG, Bajaj Allianz, ICICI Lombard, and SBI General.
There is a constant threat to businesses of companies from cyber-attacks, which want to not only preserve their confidential information but also that of their clients. The cyber-attacks can cost both time as well as money and the best way to protect the company is through cyber liability insurance. Even individuals should purchase a cyber insurance policy to protect themselves as well as their family members with the help of liability coverage which would provide them mental peace.