Cyber attacks can spell financial disaster for victims. It should be no surprise then that cyber security insurance has emerged as one of the fastest growing segments in the insurance industry.
According to insurance platform PolicyBazaar, nearly 100 per cent of cyber insurance clients are renewing their policies. Cyber insurance is no longer an optional risk-transfer tool, but a core component of enterprise risk management.
“Companies are not only renewing their cyber insurance, they are increasing the sum assured,” said Evaa Saiwal, practice head of liability and speciality risk, Policybazaar for Business.
The banking and financial services sector is unsurprisingly the largest consumer of cyber insurance, accounting for almost 35-40 per cent of the industry-wide adoption. Technology and software firms, too, have been big buyers of cyber insurance (close to 30 per cent) given that they manage vast amounts of customer and enterprise data. Hospitals, worried about sensitive patient data, have also now started looking at cyber insurance seriously.
“Many companies must have seen some kind of cyber breach happening at their end,” said Saiwal. “Some are well protected by their systems and firewalls. But it is always a matter of time and if a loophole is found, there will be a breach.”
Even for individuals, cyber security has emerged as a major challenge. Despite every possible precaution, systems may still be vulnerable to cyber attacks and cyber insurance can help at least mitigate the financial impact.
“Cyber insurance plans were earlier available to only large entities,” said Mudassir Khalil, head, reinsurance, surety and liability, Digit Insurance. “But, with the rise in cyber risks, insurance companies are offering highly customisable cyber products to MSMEs and small entities as well. Personalised cyber covers are also being designed for individuals to protect them against various types of online financial frauds and other risks they are exposed to.”
Khalil adds that the individual cyber insurance space is seeing interesting innovation. “Today it not only covers individuals against unauthorised financial transactions―both online and offline―but also extends to cases relating to cyberbullying, cyber identity theft and impersonation in the virtual world.”
Examples of the options in cyber insurance products include Bajaj Allianz’s cover for digital theft and identity theft that includes claims for IT services to recover data or fix devices after a cyber attack. It also covers the cost of prosecution against a third party for committing cyber bullying or stalking. HDFC Ergo even covers the cost of restoring or decontaminating smart home devices affected by malware attacks. You can buy insurance plans for students, working professionals and even families.