Do You Need A Cyber Insurance Cover?

By Adhil Shetty | March 30, 2018

Given data-theft may prove to be a costly affair, insurance may provide some relief. Read on to know more.

Do You Need A Cyber Insurance Cover?

Cybercrime is the biggest threat to tech-based innovations in today’s businesses. From phishing to identity theft and stealing of sensitive financial information, cybercriminals are always on the lookout for vulnerable networks to hack into. According to a Computer Emergency Response Team (CERT-In) report submitted to the parliament, there is at least one cyber offence happening virtually every 10 minutes in the country.

Not just individuals but large corporate and financial institutions like banks are amongst the most vulnerable. To offset such risks, most corporates opt for a cyber insurance plan safeguarding them against any such potential threats and its fallouts. From the investigation into the crime to any business losses or lawsuits, cyber insurance protects against various such risks.

Here is everything you need to know about cyber insurance and how you as an individual can opt for one to safeguard your online presence.

Understanding Cyber Insurance

Cyber insurance offsets risks that may occur for both individuals and enterprises on account of being a victim of such cybercrimes. Cyber insurance providers charge an annual premium as per the underlying risk factors and offer protection against loses, lawsuits, data breaches or identity theft related losses as per the individual policy. Loss of funds or property due to a fraudulent input of data or any loss of sensitive personal information or any ransomware demands are also usually covered under cyber insurance plans, but they have a cap beyond which the insurance companies will not pay.

Who Should Opt For Cyber Insurance?

Cyber insurance is a must for all corporations, small and bigger enterprises, but often ignored by individuals who use of the internet frequently. If you are making financial dealings online through platforms like net banking, online purchases on e-commerce site through debit cards and Credit Cards and more, you must explore cyber insurance plans to safeguard any financial loss owing to a cybercrime. Many general insurers today offer cyber insurance plans for both corporate and individuals.

Highlights of Cyber Insurance Plans

There are various aspects to a cyber insurance policy. The protection offered by a cyber insurance plan varies from enterprises to individuals. Organizations may seek cover to safeguard any loss of business owing to a cybercrime while individuals may need cover against loss of private sensitive information or possible phishing attacks. Some of the features offered by cyber insurance plans include:

Protection against cyber extortion:  Ransomware attacks on enterprises and individuals often seek financial payments to unblock systems. Although, most law enforcements advise non-payment of ransoms in such cases if the data is time-sensitive to companies, many end up delivering the ransom amount. A good cyber insurance plan offers the policyholder protection against such cyber extortion threats and makes sure, this is taken care of.

IT Theft: Any IT related theft of sensitive information including personal details, financial details or identity-related theft are all included in a well-oriented cyber insurance cover.

Phishing Related Losses: Phishing is a common cybercrime targeting vulnerable individuals. A cyber insurance plan ensures any phishing related losses as per the plan.

Cyber Stalking: Cyberstalking is a modern day crime where hackers stalk an individual to mentally or financially harass an individual for various reasons. A good cyber insurance plan offers protection against any cyber stalking woes including cover for legal proceedings against a potential cyber stalker.

Lawsuit Costs: Any legal aspects associated with theft of sensitive data or customer details or any costs to ascertain the reasons behind the cyber attack are mostly covered in a well designed cyber insurance plan.

Things To Think Through

Before you opt for cyber insurance ensure you have adequate protection against possible hacking attempts. Cyber insurers will only offer you such a policy after assessing your threat level and the protections you take towards it. In insurers see a lack of responsibility from the claimant’s side to protect the digital data, the insurance cover may be denied, or in many cases, the claim is denied.

So make sure to use genuine software and regularly update your antivirus and firewall systems. If you are found using any pirated software versions, you can face a claim denial for it.  Additionally indulging in any unauthorized collection of data, immoral or obscene services, any dishonest and improper conduct or any unsolicited communication will also ensure denial of any possible claims under such cyber insurance plans.

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About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of BankBazaar.com. Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

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