Cyber Insurance in India

Most of us are constantly hearing about words like Cyber Crime, Cyber Risk, Cyber Insurance and other related terms. However, not so popular concept of Cyber Insurance in the earlier years is gaining confidence amongst the corporates. To have clarity about what were the reasons for the introduction of Cyber Insurance, one must know about cybercrime and cyber risk.

What is Cybercrime?
It is defined as a crime in which a computer is the object of the crime (hacking, phishing, spamming) or is used as a tool to commit an offense. A criminal activity that involves a computer, networked device or a network can be categorized as a cybercrime. Most of the cybercrimes are carried by the cybercriminals in order to generate profit while some are done to damage the important data stored in it. A primary impact from cybercrime is financial including ransomware attacks, credit card, etc.

What is Cyber Risk?
Cyber risk means any risk of financial loss, disruption or damage to the reputation of an organization from some sort of failure of its information technology systems. The World Economic Forum ranked Cyber Attacks among the top 10 most significant risks worldwide in their Global Risks report. Therefore proving the level sophistication of these cyber-attacks. An organization’s Cyber Risk management function should be full proof, understanding the constantly evolving cyber threats and equip themselves with the best tools and techniques available in the market.

What is Cyber Insurance?
It is an insurance product which is used to protect businesses and individual owners from Internet-based risks, and more generally from risks relating to IT Infrastructure and activities. It generally covers your business' liability for a data breach involving sensitive customer information, such as Social Security numbers, credit card numbers, account numbers, driver's license numbers, and health records.
Data from the DSCI (Data Security Council of India) report showed that 350 cyber insurance policies were bought by Indian corporates in 2018 as against 250 in 2017 marking a 40 percent increase in the sale of these products. In this period, the average cost of a data breach in India rose by 7.9 percent to Rs.12 crore. 

Importance of Cyber Insurance
1. Peace of mind
By taking Cyber Insurance one can relieve his mind from all the tantrums of Cyber Crime. With the best covers in the insurance policy, almost every bad intent of the hacker can be prevented and protected. One needs to be pro-active when dealing in high-level business. All this mental tension can be avoided by opting for Cyber Insurance.

 2. Media Liability and Reputational Damage
The cover may protect an organization in the event that defamation or infringement of intellectual property claim is made against it, which could affect your reputation and impact your brand.

3. Business Interruption
One of the main benefits of having Cyber Insurance in place is that the insurer may cover you for loss of income or increased costs while your business deals with and recovers from a cyber attack.

4. Forensic Support
 Most cyber insurance policies will give you access to trained cyber specialists in the event of an attack. These specialists can work with you to assess the damage, help to recover any lost data and devise a recovery plan.

5. Privacy Infringement claims
If any data is lost or compromised as a result of a cyber attack, you may need to notify your customers and also deal with any privacy infringement claims. Your policy should cover legal costs in the event of a breach.