Cyber-attacks: You can take insurance cover for cyber risks | The Financial Express

Cyber-attacks: You can take insurance cover for cyber risks

While companies are increasingly taking cyber insurance covers, these are yet to pick up with individuals.

Cyber-attacks: You can take insurance cover for cyber risks
Even banks are encouraging their customers to buy retail cyber insurance policies.

As we live in an increasingly connected digital world, the risks of cyber-attacks are rising. There were over 6.7 lakh cyber-attacks in the country this year until June and over over three million such cases since 2019. While companies are increasingly taking cyber insurance covers, these are yet to pick up with individuals.

General insurance companies are offering exclusive coverage for individuals to protect against cyber-attacks. The policies cover first party losses such as direct financial loss, data recovery and regulatory actions. Experts suggest that individuals should buy a comprehensive personal cyber insurance cover that covers identity theft, social media cover, cyber stalking, IT theft, malware, phishing, media liability, cyber extortion, data and privacy breach by third party, etc. Even banks are encouraging their customers to buy retail cyber insurance policies.

Insurance coverage
Last year, a working group set up by Insurance Regulatory and Development Authority of India (Irdai) said that standardisation of policy wording for cyber insurance is not desirable because of the evolving nature of legislative frameworks in dealing with cyber risks, fast-growing digital ecosystem, increasing interconnectedness globally and complexity of IT systems and emergence of new risks.

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Typically, insurers cover online loss of money from bank accounts or payment wallets, defence and prosecution costs against a third party for identity theft including legal fees incurred on claim for damages against financial institutions, restoration costs of the insured’s computer due to damage caused by malware and counselling service. However, individuals must note that cyber-attacks related to cryptocurrency or accessing restricted sites are not covered under any cyber insurance. Also, property or bodily injury, mechanical failures, breakdowns are not covered.

The premium for Rs one lakh individual cyber-insurance cover can range from Rs 700 to Rs 2,000, depending on the issuing clauses. The policy can be renewed and the policyholder can add or remove any add-ons as per his requirement.

Claim process
For claims, the policyholder will have to give a written notice to the insurance company within seven days and not later than 14 days from the discovery of the cyber-attack. He has to file an FIR with the cyber cell of the local police. The documents to be submitted to the insurer in the event of a loss are copy of the FIR, signed claim form, copies of legal notice received from any affected person or entity, copies of summons received from any court for a suit filed by an affected party, copies of criminal case filed against third party, copies of invoices for expenses incurred on restoration cost, etc.

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