What Risks Are Covered Under Cybersecurity Insurance?
Cyber liability insurance provides coverage for the following conditions:
First Party Costs
- Business Interruption: The cyber insurance policy covers financial losses incurred due to interruptions in normal business operations caused by cyber incidents.
- Breach Costs: It provides coverage for expenses associated with responding to and recovering from a data breach, including forensic investigations, notification of affected individuals, credit monitoring services, public relations efforts, and legal fees.
Third-Party Costs
- Privacy and Network Security Liability Protection: A cyber policy protects the insured against claims and legal liabilities arising from privacy or network security breaches.
- Multimedia Liability: It covers claims of defamation, libel, or copyright infringement related to multimedia content produced or distributed by the insured.
- Reputational Liability: The cyber insurance policy addresses damages to the insured's reputation resulting from cyber incidents.
- IPR Infringement: It protects against claims of intellectual property rights infringement related to online activities or digital assets.
What Does a Cyber Insurance Policy Not Cover?
The cybersecurity insurance does not provide coverage for the following:
- Bodily injury, diseases, death or damage to any tangible item is not covered
- Power disruption, mechanical malfunction, equipment failure, or media breakdown resulting in any form of loss.
- Any intentional or deceitful action by the insured that violates a law, rule, or regulation.
- Damages caused due to negligence or lack of precautions to safeguard information such as credit and debit cards, bank accounts, internet connections, etc.
- Deliberately ignoring any knowledge or circumstances that may become the basis of a claim
- Ongoing legal proceedings before the policy was purchased
- Unexplained loss, or any loss due to a government order
- Losses due to participating in any malicious or dishonest activity
- Breach of trade secrets, trademarks, registered patents, actual or alleged plagiarism, copyrights or other intellectual property
- Consequential loss or damage is not covered, including the loss suffered by any third party
- Any legally uninsurable matter
- Loss in value, theft or disappearance of cryptocurrency is not covered
- Loss of any tangible property
- Purchase of sovereign funds, dealing in securities, federal funds, foreign exchange, currencies and commodities are not covered
How to Raise a Claim for Cyber Insurance in India?
Follow these steps to file a claim under Cyber Insurance in India:
- Notify Your Relationship Manager: Promptly inform your relationship manager of any cyber incident.
- Assignment of Investigator: An investigator will be appointed to examine the incident and create a temporary resolution plan.
- Hiring of Cyber Expert: In cases of severe incidents, a cyber specialist is enlisted to conduct an impartial analysis, ensuring transparency and impartiality.
- Internal Liaison: All concerned parties, including the insured, engage in discussions about the resolution. The insurer consults the policyholder on potential costs for losses, and if a cost-effective option is identified, it is pursued. Then, a final action plan is developed.
- Reporting: All details are documented and reported to the claims team. They will then review the information for final approval, after which the claim amount gets disbursed.
Note: It is the responsibility of the insured not to withhold any information which the insurer may deem relevant to be shared for a claim. Failure to comply may lead to either denial of the claim or delay.
Why Do You Need Cyber Liability Insurance?
The Problem
In today's digital age, businesses increasingly rely on the Internet for their operations. However, this heavy dependence on digital platforms exposes them to significant risks, such as cyberattacks and data breaches. The financial impact of these incidents can be devastating, leading to substantial losses and operational disruptions. Many companies struggle to fully protect themselves against these threats, leaving them vulnerable to financial and reputational damage.
The Solution
To ensure robust protection in the online sphere, comprehensive cybersecurity measures are essential. One key component of this strategy is cyber security insurance. It plays a crucial role in safeguarding businesses by providing financial protection aga. It plays a crucial role in safeguarding businesses by providing financial protection against the consequences of cyber incidents, allowing them to focus on their core operations without constant concern about potential cyber threats.
What Risks Does Your Business Face Without Cyber Insurance?
Not having cyber insurance can expose businesses to severe risks, including:
- Breach Expenses: Companies may face steep costs from data breaches, including legal fees, customer notifications, and regulatory fines.
- Ransomware Costs: Businesses might have to cover ransom payments or data recovery expenses on their own.
- Revenue Loss: Cyber attacks can disrupt operations, causing downtime and lost income that can strain financial resources.
- Trust Erosion: A cyber incident can damage customer trust and tarnish a business’s reputation.
- Data Loss: Critical data may be lost permanently during a cyber attack.
- High Recovery Costs: Post-incident recovery often requires costly expert assistance.
- Operational Disruption: Cyber incidents can cause significant downtime, disrupting business relationships and affecting partners and customers.
Common Types of Cybersecurity Attacks
The most common types of cyberattacks targeting Indian businesses are as follows:
| Type of Cyber Attack |
Description |
| DoS & DDoS Attacks |
Overwhelm a server or network with traffic, making it inaccessible to legitimate users. |
| MITM Attacks |
Man-in-the-middle attacks involve intercepting communications between two parties. |
| Phishing Attacks |
Fraudulent attempts to steal sensitive information through deceptive emails or websites. |
| Whale Phishing Attacks |
Target high-profile individuals (executives) to steal sensitive information. |
| Spear-phishing Attacks |
Targeted phishing attacks aimed at a specific individual or organization. |
| Ransomware |
Malware that locks or encrypts data, demanding payment for its release. |
| Password Attacks |
Attempts to steal, crack, or bypass passwords to gain unauthorized access. |
| SQL Injection Attacks |
Insert malicious SQL code into a query to access or manipulate databases. |
| URL Interpretation |
Modify a URL to access unauthorized resources or sensitive data. |
| DNS Spoofing |
Redirect traffic from a legitimate website to a malicious site. |
| Session Hijacking |
Take over a user's session to gain unauthorized access to a system. |
| Brute Force Attacks |
Attempting to gain access by guessing passwords or credentials through trial and error. |
| Web Attacks |
Exploit vulnerabilities in web applications to gain unauthorized access. |
| Insider Threats |
Malicious activities carried out by employees or trusted individuals within an organization. |
| Trojan Horses |
Malicious software disguised as legitimate programs, allowing unauthorized access. |
| Drive-by Attacks |
Unintentionally downloading malware from compromised websites. |
| XSS Attacks |
Cross-site scripting, where malicious scripts are injected into web pages. |
| Birthday Attack |
Exploits the mathematics behind hashing algorithms to find collisions and bypass authentication. |
| Eavesdropping Attacks |
Intercepting and listening to private communication without consent. |
| Malware Attacks |
Malicious software designed to harm or exploit systems and data. |
Who Needs Cyber Insurance Coverage?
There's been a myth floating around that only big corporations or tech giants need cyber insurance. But, that's not the case - it's for anyone who wants to protect themselves from the headaches and financial hits of cyber attacks. So, who needs it?
Well, in today’s interconnected world, pretty much anyone who uses the internet, handles sensitive data, or relies on digital systems to keep things running smoothly. Whether you're a bank, a tech company, an NBFC, or a healthcare provider, your information is a prime target for cybercriminals. And schools and small businesses are just as vulnerable.
Therefore, whether you operate an MSME, manage a large corporation, or run a startup, cyber security insurance is a must for you to safeguard your digital initiatives and ensure continuity in an ever-evolving landscape.
How Does a Cyber Liability Insurance Policy Work?
A cyber insurance policy or cyber liability insurance is designed to help businesses and organizations manage the risks and financial impacts of cyber threats, such as data breaches, cyberattacks, and other online risks.
In the event of a cyber incident, such as a data breach or cyberattack, the organisation reports the incident to the insurer and initiates the claims process. If the claim is approved, the insurer provides financial compensation to cover the costs incurred up to the policy's coverage limits. This assistance enables organisations to recover from cyber incidents more swiftly and effectively.
What Are the Best Practices for Strengthening Your Business's Cybersecurity?
Here are a few best practices to keep your business secure and protected from cyber threats:
- Enhance Network Security: Set up firewalls, continuously monitor network traffic, and deploy antivirus solutions to safeguard your systems.
- Update Software Consistently: Regularly update all software, operating systems, and security patches to protect against potential threats.
- Provide Employee Training: Offer ongoing cybersecurity training to employees, focusing on phishing prevention and secure password practices.
- Implement Robust Access Controls: Enforce multi-factor authentication and restrict access to sensitive information based on user roles.
- Maintain Regular Data Backups: Regularly back up essential data to secure, offsite locations to ensure quick recovery in case of a cyber incident.
Is Cyber Insurance and Cyber Defense Same?
Cyber Insurance and Cyber Defense both are not same. Here is the key differences:
1.Cyber Insurance: Cyber Insurance term is used in order to protect your assets from cyber attacks, cyber incidents or data breaches. It generally cover:
- Ransome attacks
- Legal fee
- Regulatory penalties
- Forensic operation in cyber
2.Cyber Defense: Cyber Defense term is used in order to protect your networks, systems, and data from various cyber threats. It generally cover:
- Employee Training on phishing
- Employee Training on social engineering
- Incident response planning
- Encrypt protocols for secure communication
Steps to reduce Cyber Risks
Protecting your systems and data requires a multi-faceted approach. By following some of the best practices, you can minimise vulnerabilities and significantly reduce the chances of falling victim to cyberattacks or risks. Below are the some of essential steps to enhance your cybersecurity posture.
- Use Strong, Unique Passwords
- Enable Multi-Factor Authentication (MFA)
- Keep Software and Systems Updated
- Implement Strong Network Security
- Educate Employees on Cybersecurity
- Regularly Backup Your Data
- Monitor for Suspicious Activity
- Secure Your Endpoints
- Create a Robust Incident Response Plan
- Consider Cyber Insurance
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