Why is Cyber Insurance a Necessity in Today's Web World?
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The rising threat to cyber security, with attacks like WannaCry increasing in number, along with the higher dependency on the web, has brought about the need for another arm in the insurance sector– cyber insurance. The idea to get your online business or data insured has so far been an alien concept to many in India. There are many insurance companies here that offer packages related to cyber insurance, but the idea still hasn’t taken off.
Indian Market Needs Awareness
Overseas insurance companies have been offering cyber insurance keeping in mind the advent of tech companies. But in India, it’s a different scenario. “It’s a relatively new concept, especially in markets here. Abroad, it has been present for three-four years now. But as more and more transactions happen online, especially financial, incidents of cyber fraud are also increasing. Cyber terrorism is also a new threat, people are extorting others online, threatening them that their data will be destroyed if they don’t pay ransom,” said KG Krishnamoorthy Rao, the MD and CEO of Future Generali India Insurance, adding, “Even if cyber insurance is not popular now, all it needs is awareness and then there will be a market for this.”
His company is awaiting approvals to launch their cyber insurance package for the public.
Other market leaders, too agree, that awareness is key to this issue. “Most companies haven’t taken up this policy so far. It’s critical that when someone is transacting online, their information is not leaked or misused. It’s mostly the banking sector or payment wallets that urgently need cyber insurance. While the loss due to a cyber attack cannot be avoided, it can definitely be compensated,” said Shuporna Chakrabarty from AVP-IndiaFirst Life Insurance.
Cyber Insurance Coverage
Cyber insurance provides for a number of safety nets for an online business. Rao talked about some of the damages that are covered within cyber insurance. “Economic loss suffered by a client because of a cyber attack is eligible for insurance and the insurance company is liable to make up for the loss. Even the transmission of data because of an e-threat, where the data is destroyed, is covered by the policy. Another important factor is when the data is lost. The expenses to restore the data are covered by the insurance agent,” added Rao.
While there are not many challenges in dealing with cyber insurance, Rao said expert intervention was required while handling these cases. “When a client claims a loss or damage, we need a cyber security expert to verify it. These damages are not easy to determine and it takes a longer time,” said Rao.
The problem so far exists in the fact that in India people still don’t know that they can claim this. “In India, we haven’t yet evolved to a point that we can sue a company saying that my information is leaked,” said Chakrabarty.