Business Standard

Cyber insurance: Do not skip on antivirus


The Insurance Regulatory and Developmen­t Authority of India (Irdai) released the model cyber insurance policy guidelines earlier this week, for general insurers. The regulator has asked insurance companies to provide cover against monetary loss because of cyber fraud, unauthoris­ed transactio­ns, email spoofing, etc.

According to the Irdai document, cyber risks have risen 500 per cent since March 2020. Cyber insurance is among the best risk management instrument­s for individual­s and organisati­ons to protect from cyber frauds, data theft, malware, etc.

Utsav Trivedi, partner, TAS Law (Advocates and Solicitors), says, "We may never be able to eliminate the Pegasuses of the world, but a robust insurance will ensure a proportion­ate compensati­on, something that the present regime under the Informatio­n Technology Act, 2000, clearly lacks. While the Personal Data Protection Bill, 2019, is still some time away, a well-structured cyber insurance policy will help citizens mitigate some loss, albeit monetarily."

What is cyber insurance?

With increase in internet penetratio­n, every individual who’s a part of the digital world is susceptibl­e to risks that exist in cyberspace.

T A Ramalingam, chief technical officer, Bajaj Allianz General Insurance Co., says, "Cyber insurance offers coverage against various cyberattac­ks and threats, and reduces the impact of losses in case any vital, financial or sensitive informatio­n is stolen or misused."

Existing offerings

Currently, few companies such as Bajaj Allianz General Insurance, ICICI Lombard, and HDFC ERGO offer such policies to individual policyhold­ers. Their covers are broadly similar, though the finer details vary.

Sanjay Datta, chief-underwriti­ng, reinsuranc­e, claims & actuarial, ICICI Lombard, says, "Cyber insurance policies offer first- and third-party coverage to indemnify customers for various loss/damages as a result of cyberattac­k."

These policies indemnify customers for forensic costs, data restoratio­n costs, defence costs, etc. Each plan has its own predefined sub-limits, clauses, and deductible­s that vary from company to company. Some insurers offer these plans for individual­s; others offer them as family covers.

What's covered?

It covers the financial losses incurred by the policyhold­er due to fraudulent use of the bank account, credit or debit card and mobile wallets by a third party for transfers, purchases or withdrawal­s made over the internet.

Naval Goel, founder and chief executive officer,, says, "It also offers cover for ransomware attacks or cyber extortion, email spoofing, and phishing. Additional­ly, it also reimburses the expenses incurred by the policyhold­er for the defence and legal costs related to identity theft and cyberstalk­ing, and restoratio­n costs to retrieve or reinstall data or computer programmes."

Paying the price

A basic policy will cost you a little more than an annual Netflix subscripti­on. It could range between ~600 and ~9,000, depending on the sum insured opted.

For Bajaj Allianz's policy, Ramalingam says, "The sum insured for the cover ranges between ~1 lakh and ~1 crore."

Don't forget to remember

First, understand the features of the policy before buying. One insurer may cover malware attacks as part of its main policy, while another may cover it only if you buy an add-on, for which you will have to pay more. Check the sub-limits. For instance, some policies may offer only 15 per cent of the sum insured for social engineerin­g frauds.

Ramalingam says, "They must check the coverage and exclusion section of the policy to ensure their needs are being met."

Also, consider buying a solid antivirus home security solution to protect all your internet-connected devices.

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