Data breaches and cyber attacks are most common these days. The recent case of Aadhaar card data breaching and the access to the information available for just Rs 500 has raised concerns over the security of one’s personal information.
Data breaches and cyber attacks are most common these days. The recent case of Aadhaar card data breaching and the access to the information available for just Rs 500 has raised concerns over the security of one’s personal information. Though the report is not still verified, and even if the Aadhaar data is safe and cannot be breached, the worry of data security can’t be overlooked.
The technological development has given rise to a cyber world constituting cyber space. Internet users are increasing tremendously every year and at the same time, there is also rise in the number of people using mobiles and smartphones. With the increase in user database, risk of data breaches, cyber attacks and IoT failures expose individuals to compromised privacy, theft of intellectual property and property damage.
Gartner defines cyber insurance as coverage protecting “against losses related to cyber risks, such as data theft/loss, business interruption caused by a computer malfunction or virus and fines or lost income because of system downtime, network intrusion and/or information security breaches.”
The last decade has very well shown the value of cyber security insurance for banks, health care providers and government agencies. But now, one can observe cyber insurance moving slowly towards the consumer base. Cyber attacks or data breaches cannot solely be attributed to the criminal hackers, discharging malware or malicious code into your system. Regardless of who breached the data, once your data is stolen, you are the one who is responsible and will incur costly expenses to restore the lost data.
Products today require something beyond the identity theft protection, this is why cyber security insurance has come into play for individuals.
Cyber security insurance is useful for individuals who may have a lot to lose if their systems are attacked. The individuals fear of losing online data or having their bank accounts emptied and hackers find success with affluent customers who have a lot to lose. Thereby it is seen in the upcoming years consumers will come to regard cyber security insurance as a necessary expense.
Why Cyber Insurance is the need of the hour?
While banks, retailers or credit card companies can mostly be held responsible for losing their customers’ data, but they cannot be trusted upon to cover the costs of everything that might go wrong. For example, in cases of fraud and ransom ware, individuals may find themselves responsible for the cost.
The cyber security insurance cover for individuals ranges from data restoration after an attack to advice if the customer is a victim of cyber extortion or cyber bullying. It will also cover reputation management costs that will pay out on the amount of hiring a crisis consultant if compromising photos or texts are found to be leaked from the hacked device.
Cyber extortion is when an individual or group by using e-mail threatens an individual’s computer system unless that individual pays a ransom amount to protect his computer system. Cyber extortionists usually email stating that they have or can have access to confidential information and data. They threaten to exploit a security leak or launch an attack that will harm the individual’s computer network or release information unless they are paid an amount within a specific period. Many cyber security insurance policies now include both coverage for this type of claim and, more importantly, access to experts who can help you manage the situation.
Crisis management experts can help an individual sort through the steps necessary that are required to meet the legal requirements and to minimize the damage to practice and reputation of the individual in the event of a data breach. This serves as a prevention and not cure!
Which policy should an individual purchase?
Cyber security insurance is a fairly new concept in India. So there’s a lot of variation among policies, and a lot of room for negotiation for those who are opting for it.
There are various new policies, which are coming up in the market and are designed as a supplement to the existing homeowners’ insurance policies. The amount of the policy is fixed according to the alteration limits for each key area, consisting of cyber extortion, data restoration, crisis management and cyber bullying. Usually, a separate amount is charged for data restoration.
A good policy can even cover any regulatory fines or penalties that an individual might incur because of a data breach.
Before you purchase any policy make sure your cyber security insurance policy covers laptops and mobile devices as well, to give yourself coverage in as many situations as possible. Work with your insurance expert to amalgamate cyber security with a general policy and employer’s liability policy, if possible.
If you want to give yourself the most seamless possible coverage, all in all, personal cyber security insurance policy is a good idea. But poring over the particulars of coverage policies before a deal is signed is always a good idea.
(Harpreet Singh, Head-General Insurance, Sridhar Insurance Brokers Pvt Ltd)