Cyber Insurance

Boon or Curse?

Technology has caused the world to become a smaller place to surf. However, the same technology has made the world a bigger hunting ground for hackers. Today, Data is worth more than gold. And it is of utmost importance for business organizations to safeguard their valuable assets.
Insurance performs a significant role when one wants to mitigate and manage their risks. Hence, when it comes to Cyber Risks, Cyber Insurance, also known as cyber risk insurance, is a new age policy that tries to safeguard online users from online fraudulent activities that can subject them to loss.
In the COVID-19 era where the due emphasis is on distant working and communications, it is critical to protect your digital means from this digital virus.

Cyber security

Companies offering Cyber Security Insurance Policies?

Some of the giants of the Insurance market are offering these policies. A few of them being AXA, AIG, Travelers, etc. One can check the companies offering these services in their respective countries.

Types of Cyber Security Insurance Policies?

  1. Individual Cyber Security Insurance: It is meant for daily online users. The policy covers risks associated with fraudulent activities like identity theft, malware attacks, cyberstalking, IT theft loss, and social media liabilities.
  2. Cyber Liability Insurance: It covers cyber risks associated with IT firms. IT firms are liable for damages when it comes to customers’ personal and financial data stored on the servers.

Inclusions of Cyber Security Insurance Policies?

Examples of the inclusions are as follows:

  1. Identity Theft: Use, deletion, or alteration of personal data stored on the computer:
    • It covers prosecution costs which arise when a case is filed against a third party.
    • Cost of transportation to the court and photocopying of documents.
  2. Social Media Liability: Identify theft occurring on social media account.
    • It covers prosecution costs which arise while filing a legal case against a third party.
    • Costs of transportation to the court and photocopying of documents.
  3. Cyber Stalking: Using digital media to harass or frighten an online user.
    • Costs which arise when a legal case is raised against a third party.
  4. Malware Attacks: This is a computer program which is received through texts, file transfer, downloaded programs or malicious activities on digital devices.
    • It covers restoration cost of damage to the digital device caused by malware.
    • Costs of transportation to the court and photocopying of documents.
  5. IT Theft Loss: Cyber intrusion in the computer which led to unauthorised payment to third parties.
    • Financial loss due to IT theft.
    • Legal expenses which arise from a claim lodged by a third party.
    • Prosecution cost against a third party for causing IT theft.
  6. Phishing: Unauthorised access to usernames, passwords and credit card details.
    • Financial loss due to loss of sensitive information.
    • Prosecution costs which arise against a third party for phishing attack.
  7. Email Spoofing: Forgery or manipulation of email headers so that the recipients understand that the email is from the actual source.
    • Financial expenses arising out of email spoofing.
    • Prosecution costs which are against a third party.
  8. Media Liability Claims: Unintended publication or broadcast of any digital content as a result of cyber-attack.
    • Prosecution costs to claim compensation from a third party.
    • Costs of transportation to court and photocopying of documents.
  9. Cyber Extortion: Threat to cause privacy breach, cyber-attack or data breach.
    • Loss caused by such threats.
    • Prosecution costs which arise when claiming compensation costs from a third party.
  10. Privacy & Data Breach by third party: Unauthorised disclosure of personal data.
    • Legal expenses insured to claim compensation from a third party when any of the above-mentioned breaches arises.

Exclusions of Cyber Security Insurance Policies?

Some of the exclusions under the policy are:

  1. Dishonest or improper conduct of the insured which led to the claim
  2. Physical injury caused due to cyber attack
  3. Property damage caused by cyber attack
  4. Unsolicited communications by the policy holder
  5. Mechanical failure, standard depreciation, electrical disturbance and media failure or malfunction

Important Aspects

Before purchasing a cyber security insurance, it makes sense to grasp certain points that will help in gaining the maximum out of the insurance.

  1. If a claim falls under multiple insurance clauses, compensation can be claimed only for one.
  2. Cyber security insurance can be extended to cover risks occurring at any location across the world.
  3. If the company does not delete the access to sensitive data for employees no longer a part of the organisation, the insurance company might not approve the claim in case of cyber crime.
  4. To get a cyber security insurance, the company must have a written data protection/information security policy.
    The antivirus, anti-spyware and anti-malware software should be updated regularly.

Prevention is always better than cure. Hence, it is advised to ensure proper and updated security practices and tools in place to defend oneself from such attacks.

Please note that we have relied upon various sources for compiling the above information. Readers are advised to contact their insurance companies to acquire an accurate understanding of their insurance policies.

 

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