India is said to have the third–largest number of users of internet in the world.Our country is rapidly expanding its digital markets. Though this is quite reassuring in many ways, the growing digitalization inevitably brings forth the fear of being hacked. In fact, there were over 1.1 million cyber-attacks reported in India alone in 2020. The statistics also indicate that over 66% of organisations present in India experienced data breaches in the same year.
Hence, it is important to safeguard your information that is present on the internet. This is especially essential for companies that handle vast amounts of sensitive personal information about their customers.This is where a cyber cyber insurance policy can come in handy.In this article, we will take a quick look at what cyber insurance is and how it can help you.
What is a Cyber Insurance Policy?
Cybersecurity insurance protects you financially against many of the expenses that arise due to data breaches such as the legal fees and extortion that the hacker may compel you to pay. Cyber insurance coverage works just like any other form of insurance. You pay a certain amount of premium in exchange for financially protection against the damages caused by a data breach during the insured period.
What Makes Cyber Insurance So Important?
The internet is like a big basket of data where the open public network is accessible to anyone with sound knowledge of relevant technology. Many companies use the internet to store and process several types of data such as a customer’s personal information, company revenue statistics and employee bank details. This makes the company a hub of sensitive information that is susceptible to multiple cyber risks.
Hackers who steal sensitive data and use the same for their benefit can cause substantial damage to the company’s reputation and potentially decrease its market capitalization as well! If all the bank accounts of your customers were stripped by a hacker,it is your company that will be held liable. Hence, if you own a company that stores data on the internet, it is better to get a cyber insurance policy as it protects you financially against many of the expenses that can arise due to illegal activities by hackers. Getting a cyber insurance policy can help you with proper risk management of your business. You may also want to get a cyber insurance policy if you have recently been receiving threats of cyberattacks.
How Extensive is Cyber Insurance Coverage?
Cyber security insurance coverage is inherently quite extensive in its coverage. To give you a clearer idea, here is a look at what a cyber insurance policy can potentially cover:
It provides you with a worldwide coverage
Reputed insurance providers offer worldwide coverage with their cyber insurance policies. This global protection can be quite beneficial for you if you have company branches in other parts of the world.
It can cover damages to your system due to the cyber attack
Quite often, a cyber–attack not only damages the software but also the hardware of the computer system that it targets. A cyber insurance policy will cover you against any loss or damage to IT records/data. It also covers the costs for the repair of the computer systems that are not operational due to the cyberattack.
It covers you against data breaches and identity theft
Hackers usually attack the servers of a company to either steal data or cause disruptions in the workings of a company. The cyber security insurance cover will financially protect a company against third–party claims for loss of personal information. Cyber insurance also protects a company against the loss of commercially confidential information, such as the information on the competitive advantage held by your company.
It covers you for losses due to interruption of business
It is quite obvious that a company will stop operating when its databases is hacked. As a result, the company will probably not be able to generate revenue until the breach is resolved. This could result in a serious cash–flow problem for the company. Under such circumstances, cyber insurance can have your back. It will cover the loss of profits that are caused due to the disruption.
It covers penalties that are borne by the company
It is the responsibility of a company to ensure the security of the data it stores. The government has many guidelines in place that should be followed by business owners to reduce their susceptibility to a cyber–attack. However, it can sometimes be quite difficult to ensure that your company follows all the guidelines if you do not have sufficient computer knowledge. A cyber insurance cover will also cover you against many (if not all) penalties and fines imposed by the government.
Cyber insurance helps you protect your brand image
The news of a cyber–attack on your company can easily tarnish your company’s reputation among your customers. Thus, you will need to increase your expenditure on fixing the public relations that are damaged due to the cyber–attack. This cost can be compensated for by the insurance company through a cyber insurance policy.
What is Not Covered in a Cyber Insurance Policy?
Though a cyber insurance policy is quite extensive in its coverage, there are a few things it does not cover, such as:
Electronic disturbances (these are not cyber–attacks)
Any fraudulent activity in the cyberspace that is caused by the insured person
Damages incurred due to hack that occurred before or after the insurance policy tenure
With the digitalisation of the world, it has become quite important for companies to get a cyber defence insurance policy. So, get yourself a cyber defence insurance policy directly and keep your data and online presence protected.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.