The Buyt Desk
The pandemic’s fallout has given a boom to digitalization. The corporate and individuals both have switched to digital platforms either out of convenience or obligation. The switch is well appreciated but has a flip side, a rise in cybercrime.
And cybercrime is no longer restricted to financial transactions. It has expanded to ransomware, malware, denial-of-service (DDOS), cyberstalking, email spoofing, cyber-extortion and phishing. In these cyberattacks, fraudsters hit the network and expose sensitive data. The recent attack on U.S. Colonial Pipeline and SolarWind is an example of the same.
What is Cyber Insurance?
Cyber insurance is a hedge for businesses and individuals against cybercrime. Like a real stalker or thief, cyber frauds get into the digital place of individuals and businesses to steal data, but unlike them, their presence remains unidentified until they harm the system. It is because fraudsters use advanced and complex technology to trace users’ digital footprint and use it to siphon money.
Cyber insurance is a security that ensures the protection of businesses and individuals against cybercrime. The policy compensates cybercrime victims.
Earlier, cyber insurance was available only for corporates, but following the increased number of attacks on individuals, the Insurance Regulatory and Development Authority of India (IRADI) felt the need for cyber insurance for individuals also. It announced the model cyber insurance policy that covers both. So, now cyber insurance is available for both businesses and individuals.
What Is Covered By Cyber Insurance?
The insurance covers financial losses incurred due to the cyber attack. Some insurers also compensate for reputational damage that happened because of identity theft, e.g. image damage by social media account hacking. It also covers the legal expenses that individuals or organizations have to go through for following the lawsuit.
How Much Does Cyber Policy Cost?
The cost of cyber insurance and its premium amount depends on multiple factors, such as the organization size, how sensitive the customer information is that the company is holding, organization preparedness for cyber attacks, etc.
Organizations generally opt for the amount between Rs 40 Crores to Rs 200 Crores. And the premium for the same varies between 1-4% of the sum insured.
An individual can take the cyber insurance cover up to 5 Lakhs, and its premium ranges between 2 to 5 thousand. In the individual case, the insurance covers financial losses because of unauthorized financial transactions. Often senior citizens become the prey of such frauds. The insurance cover provides security to users in this case.
With the rise in cyberattack cases at corporate and individual levels, cyber insurance has become the talking point in the country. Still, a few companies and individuals are considering going for this.
The experts in the industry feel that every individual connected to the internet must take cyber insurance. As cyberattack is topping the list of attacks and by the end of the year, the attack might cause damage of approx $6 Trillion.
