Cybersecurity Insurance: Claims & Cost?
Updated: Aug 21, 2022
Cyber Insurance: Your ultimate guide to cyber insurance and claims. Better equipped now than every.
Cost of cyber insurance? What is the coverage of cyber insurance? Is individual covered in a company cyber insurance? What is the claim rate? These are major queries that come to mind. We google and finally don't get. We are making an attempt to solve this confusion.
Cyber Security insurance requirements: Cybersecurity insurance market is on the raise. Look at the keyword search results from a famous keyword ranking website. But, do you have what it takes to cover a cyber risk insurance claim?
Cyber insurance coverage in India is a growing industry. The recent PWC-DSCI report highlighted the increasing number of companies seeking to secure their cyber risks. Major sectors in India that are seeking to secure their cyber risk exposure include IT, ITES, banking and financial service industries, pharma, manufacturing, hospitality, and R&D. According to the report, the cyber insurance market in India is expected to grow at a CAGR of 27% and surpass $22.8 billion in five years.
Corporate Cyber Risk Insurance: For a typical corporate cyber policy, which has a maximum assured amount of Rs 50 crore, the premiums are up by 4.5 to 4.8 lakh per year.
Cyber Security Insurance: Up to 5 Lakhs / year
Cyber Cover for IT Sector: Up to 2 Lakhs / year
Cyber Liability Cover: Up to 3 Lakhs / year
Data Theft Insurance: Up to 2 Lakhs / year
Individual Cybersecurity Insurance: The cost of cyber insurance policies depends on the amount of cover desired. Generally, an individual cyber insurance policy will cost between Rs. 650 and Rs. 700 per year. It is important to note that these policies do not cover the future loss of profits or intellectual property. In addition, such insurance policies are required to be renewed annually. Premiums for individual cyber insurance policies are relatively low. An individual cyber insurance policy will cost between one and four percent of the sum insured.
The number of claims are increasing and the regulatory is improving rules on this new domain. It is right time even now. It is always better to be prepared for an online attack. We have been trying to explain the same to many clients that the first step to cybersecurity is an insurance cover. Any valuable CISO would explain the benefits of Insurance. It is important to find more companies and individuals on boarded to insurance.
Cyber security insurance for small business and startups should be mandate. What is covered in cyber risk insurance?
How to buy your cyber risk insurance?
Ideally you should have a Risk Management Assessment reports. But, it can be done later also, for a comprehensive cover. What are the different types of Cyber Risk Insurance (CRI) offerings?
Types of CRI #1: Cyber Risk Insurance Types?
CRI Coverage #2: What does each insurance cover?
Claim CRI #3: How to claim Cyber Risk Insurance?
Types of CRI #1: Cyber Risk Insurance Types?
There are four types of cyber risk insurance categories. 1. Cyber Security Insurance: Coverage against Cyber Extortion Compare Online from 15+ Insurers
2. Cyber Cover for IT Sector: Coverage against Malware Intrusion Covers all Legal Expenses Incurred
3. Cyber Liability Cover: Coverage against any Data Breach Ensure Cyber Safety and Security
4. Data Theft Insurance: Financial Cost Coverage Easy Online Purchase Facility
Cyber insurance coverage in India is a growing industry. The recent PWC-DSCI report highlighted the increasing number of companies seeking to secure their cyber risks. Major sectors in India that are seeking to secure their cyber risk exposure include IT, ITES, banking and financial service industries, pharma, manufacturing, hospitality, and R&D. According to the report, the cyber insurance market in India is expected to grow at a CAGR of 27% and surpass $22.8 billion in five years.
The cost of cyber insurance policies depends on the amount of cover desired. Generally, an individual cyber insurance policy will cost between Rs. 650 and Rs. 700 per year. It is important to note that these policies do not cover the future loss of profits or intellectual property. In addition, such insurance policies are required to be renewed annually. Premiums for individual cyber insurance policies are relatively low. An individual cyber insurance policy will cost between one and four percent of the sum insured.
CRI Coverage #2: What does each insurance cover?
List of cyber risk insurance policies coverage (subject to changes):
Denial of service attacks or the inability to access websites or systems.
Unauthorized access to, use of, or tampering with data.
Disclosure of confidential data (invasion of privacy).
Malicious or accidental loss of data or digital assets.
Introduction of malicious code or viruses.
Cyber extortion or terrorism threats.
Personal media injury (defamation, libel, or slander) from electronic content.
Regulatory action, notification, or defense expenses.
Crisis management and public relations expenses.
Data or system restoration.
Business interruption expenses.
Identity theft.
Unauthorized transactions.
Reputational injury.
Cyberbullying.
Cyber extortion.
Malware intrusion.
Legal expenses.
Data restoration costs.
Forensic expenses.
Consequential losses.
List of features that are excluded in many cyber risk insurance policies (subjected to changes):
Lack of precautionary measures on your part to safeguard information
Consequential loss or damage including any loss suffered by a Third Party.
Physical injury, disease, disability, sickness or death.
Any matter that’s uninsurable under the law.
Participation, direction or knowledge of any dishonest, criminal or malicious activity.
Theft, loss in value, disappearance, inaccessibility of any crypto currency.
Knowledge of any facts or circumstances that could be the basis of a claim.
Any damage or destruction to any tangible property and losses.
Any legal proceedings that started before the commencement of the policy.
Inherent product defect/wear and tear and losses owing to the same
Business activities such as e-trading, blogging, etc., from which you earn money.
Dealing in or purchase of securities, commodities, sovereign fund, derivatives, federal fund, currencies, foreign exchange.
Unexplained loss or mysterious disappearance.
Distribution of unsolicited correspondence or communication.
Any loss or damage caused by a government order.
War, terrorism, looting and Government acts.
Actual or alleged plagiarism or breach of any trade secrets, registered patents, trademarks, trade names, copyrights, licenses, or any other intellectual property.
Criminal or fraudulent act
Negligent disregard for computer security
Loss to system not owned or operated
Bodily injury
Contractual liability
Act of terrorism, war, military action
Act of God
Intellectual property Theft
Seizure or destruction by systems of the government
Cost of Cybersecurity Insurance: Premium to be paid would vary as per data and sector of business along with size of coverage required. Cyber insurance premiums in India have been on an upward trend for the past several years due to the increasing number of cyber attacks. The demand for cyber insurance policies has increased exponentially in recent years, with insurers now spending $20 million per year on managing their risk. These high premium rates are largely due to the rise in activity by ransomware groups. Luckily, there are a few options available for cyber policyholders.
For instance, Future Generali India Insurance reported an increase in the number of claims it receives from businesses following cyberattacks. Their claims for such attacks rose from 20% in March to nearly 40% by August 2020. As a result, cyber insurance premiums rose by 40 percent in India between March and September.
For a typical corporate cyber policy, which has a maximum assured amount of Rs 50 crore, the premiums are up by 4.5 to 4.8 lakh per year.
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Claim CRI #3: How to claim Cyber Risk Insurance?
As the threat of cybercrime continues to grow, so does the need for cybersecurity. Organizations are increasingly turning to digital technology to help mitigate risks. This includes the use of the internet to share data, make money transactions, and even enroll in online classes. However, the increased reliance on the internet is increasing the likelihood of cyber-attacks. Because of this, cyber-crime is on the rise and India is one of the countries most at risk.
Thankfully, there are ways to get the funds that you need. Cyber insurance policies are designed to help protect you from the consequences of cyber-attacks. For instance, HDFC Ergo Cyber Sachet insurance covers fraudulent use of credit or debit cards, e-wallet fraud, and phishing. It also covers expenses to prosecute perpetrators. If you're an online entrepreneur, student, or working professional, this insurance is designed to protect your business.
Policy period
Every business in India is now using the Internet, thanks to the pandemic which triggered the shift. Everything from money transactions to data sharing, even online classes, are now conducted on the Internet. However, this increased reliance on the internet raises the risk of cyber-attacks. Cybercrime has increased significantly over the past few years, and India is among the nations that have been most affected by it. To protect your business, you should consider purchasing cyber insurance.
The Insurance Regulatory and Development Authority of India (Irdai) has issued guidelines on how to structure cyber insurance policies. Considering the rise of digital frauds and cyber theft in the country, these guidelines are vital. However, there are still several important things to keep in mind when purchasing cyber insurance. First of all, you should understand the coverage. The policy must include exclusions and coverage limits. Second, you should look for a policy that gives you enough time to claim.
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