The hazards of cyberattacks are increasing as we live in a digital world that is more connected than ever. Up to June of this year, the nation experienced over 6.7 lakh cyberattacks, and there have been over three million such incidents since 2019. While businesses are increasingly purchasing cyber insurance, individual consumers have not yet embraced these policies.
Specific protection against cyberattacks is now available to individuals from general insurance firms. First-party losses covered by the policies include direct money losses, data recovery, and legal actions. Experts advise people to purchase a thorough personal cyber insurance policy that includes coverage for identity theft, social media cover, cyberstalking, IT theft, malware, phishing, media liability, cyber extortion by third parties, etc. Even banks are urging their clients to purchase consumer cyber insurance coverage.
What does cyber insurance protect?
The rapidly expanding digital ecosystem, growing global interconnectedness, the complexity of IT systems, and the emergence of new risks, according to a working group established by the Insurance Regulatory and Development Authority of India (IRDAI) last year, make it undesirable to standardize policy wording for cyber insurance.
In most cases, insurance companies will pay for the following:
- Online theft of funds from bank accounts or payment wallets.
- Defence and prosecution costs against a third party for identity theft.
- Legal costs associated with a claim for damages against financial institutions.
- Costs associated with restoring the insured’s computer after malware damage.
- Counselling services.
Depending on the issuing provisions, the cover of an individual cyber insurance policy for one lakh rupees might range from Rs 700 to Rs 2,000. The policyholder has the option to add or remove any add-ons in accordance with his needs while renewing the coverage.
What is not covered?
However, people should be aware that no cyber insurance would provide coverage for cyberattacks using cryptocurrencies or accessing prohibited websites. Additionally, breakdowns, mechanical failures, and property or human injuries are not covered.
How to proceed with the claim?
The policyholder must notify the insurance company in writing of any claims no later than 14 days after discovering the cyber-attack, but no later than seven days. An insured person must submit an FIR to the local police’s cyber cell. The following documents must be provided to the insurer in the event of a loss: a copy of the FIR, a claim form that has been signed, copies of any legal notices received from parties who were harmed, copies of summonses obtained from courts for actions brought by parties who were harmed, copies of criminal cases brought against third parties, copies of invoices for costs associated with restoration, etc.