New Delhi: With the increasing penetration of the Internet, cyber attacks have multiplied at an alarming rate. Anyone in cyberspace is sensitive to the risks that exist in cyberspace. 2021 has been a year of change in the cyber insurance market. Recent events have shown that cyberspace presents risks that require attention, expertise and solutions. Some reports suggest that 80% of Indians have fallen victim to some form of cybercrime in their lifetime, while others suggest that 63% of Indians have lost their money due to cybercrime.
Amidst these cyber attacks and cybercrimes among individuals, industries and businesses of all sizes, cyber insurance is becoming more and more popular. They are the need of the hour, experts say. The Insurance Regulatory and Development Authority of India (Irdai) recently released a guidance document on product structure for cyber insurance, keeping this in perspective. Cyber insurance policies are designed to protect policyholders against cybercrime. Cyber risks have accelerated by up to 500% since the first lockdown was imposed in India in March 2020. There is an increase in coronavirus-themed spam, likely resulting in more personal computers and infected phones. , according to the Irdai circular. This newspaper has spoken to experts in cyber insurance.
What is cyber insurance?
A cyber incident / attack can affect your ability to function normally, impact your finances, and damage your reputation in the long run. While cyber insurance doesn’t protect you against an attack, it does shift some of the financial impact and can help mitigate disruption as well. Cyber insurance is a risk management tool and risk management involves deciding which risks to manage, avoid, accept, control or transfer. A cyber insurance policy helps bear the costs involved in responding to and recovering from an incident.
“As people around the world continue to fight the pandemic, cybercriminals continue to capitalize on the crisis to target organizations and individuals around the world. Meanwhile, the cost of recovery from a breach has increased year by year. The Allianz 2021 Risk Barometer continues to rank cyber as the top three global business risks for the past three years. So, consider cyber insurance as an integral part of their risk transfer strategy ”, says Mahesh Chainani, Director and Senior Director of Howden Insurance Brokers India Private Limited (Howden India) which provides insurance brokerage services. , risk management and claims advice on a global scale. .
Gaurav Batra, CEO of CyberFrat, an enterprise risk management services company with a special focus on cybersecurity, risk management and emerging technologies, said: “Recently, cybercrimes related to crypto mining , phishing, Trojans and and have started to target not only large companies, but also small and medium-sized businesses. Endpoint attacks have become complex, and known malware samples have already surpassed one billion. Are businesses prepared to defend themselves against these attacks? With the increasing threat landscape, regulatory fines, and legal fees, there is still a lot to do to prepare for the unknown. Backups and cyber insurance are two convenient options that no one can afford to miss. “
So what does cyber insurance cover? A cyber insurance policy transfers the financial risk resulting from a cyber breach. Typically, a cyber insurance policy covers:
Incident Response: Coverage for first party losses, including specialist assistance in incident response, including IT forensic assistance, crisis consultants, legal specialists, public relations experts and credit monitoring spending.
Business continuity — Business interruption coverage for lost revenue incurred as a result of a network outage or outage as a result of a cyber event. Coverage for the cost of repairing, restoring or replacing digital and data assets.
Third Party Liability — Defense costs and claims arising from your legal liability for claims made against you for inquiries as a result of a breach of privacy or breach of security. Coverage of regulatory investigation costs.
Regarding how to buy cyber insurance, Mahesh Chainani of Howden explains: “Insurance companies usually rely on an application form that takes into account the overview of corporate, financial, commercial and business infrastructure. security of the organization. Since this is a long tail policy, it is advisable to consider factors other than the premium when choosing an insurance policy. Some of the factors that should be taken into account when choosing an insurer are the past claims payment ratio, the insurer’s expertise in cyber risks, and incident assistance. Working with a reputable broker can give you invaluable support on your cyberinsurance journey, as well as help you understand the risks unique to your business and negotiate the most appropriate coverage and premium on your behalf.
Like any insurance policy, coverage is offered on the basis of a quote made to the insurance company. Bonuses depend on several factors, including the company’s annual revenue, industry, and type of data held.
With the increase in ransomware attacks (where cybercriminals lock the victim off their networks and demand a ransom to decrypt systems), insurers are also examining the organization’s readiness to respond to an incident and their levels of maturity in the matter. cybersecurity. A victim has to undergo many traumas to which the cyber expert Ritesh Bhatia declares: “For the victim, the damage is not only financial, but also reputational and psychological. Investigations, forensics, and litigation are costly, and in many cases individuals also need counseling for a longer period of time due to the emotional trauma of cyberbullying. A cyber insurance policy is an indispensable instrument as almost every individual is a victim of one form or another of cybercrime and luckily cyber insurance now covers all risks related to cybercrime such as identity theft, ransomware , cyberbullying, financial fraud. , loss mitigation, extortion and many more.