In the 21st century, the world is divided into two parts. i.e. the real and physical world and the cyber or digital world. And just like the two worlds, we all have two not-so-distinct but still different identities. The cyber-world and cyber policy make us feel safe and let us act on our impulses, as the harm or danger doesn’t seem to be direct, and maybe this is one of the reasons behind the increasing rate of cybercrimes.
As the number of cybercrimes is increasing day by day, it has now become crucial for one to set some preventive measures against it, and one of those preventive and protective measures is cyber insurance. Cyber insurance policy was introduced to protect people from crimes happening in the cyber world, such as identity theft, hacking into one’s private accounts, leaking one’s sensitive information without consent, etc.
Overview
With the rise of online fraud and data breaches, protecting against cyber risks has become essential. The table below explains the key aspects of Cyber liability Insurance and who can benefit from it.
| Type of Insurance | Cyber Insurance |
|---|
| Cybersecurity Insurance Meaning | An insurance policy that provides financial coverage in case someone becomes a victim of cybercrime |
| Purpose | To protect people from crimes in the cyber world |
| Coverage | Covers a wide variety of cybercrimes like breach of data, online fraud, etc. |
| Who can get it? | Individuals and business entities |
What Is A Cyber Attack?
A cyber-attack is a criminal activity wherein individuals attempt to use someone’s personal information or system for personal gain. Anyone can fall prey to cyber-attacks, including people and business entities. Attackers can use several ways to plan a cyber-attack, such as phishing, identity theft, malware, etc.
Condition Of Cyber Threat In India
The seriousness of the situation is best delivered by presenting accurate numbers. In the year 2023, a report recorded that there were around 11 million cyberattacks across the country, wherein people lost approximately 1750 crore to the attackers. Some of the most common types of cybercrime are malware attacks, phishing, social engineering, ransomware, and breaches of data, and one of the latest techniques is digital arrest.
When one falls prey to any type of criminal activity, they not only lose personal information or money, but it also greatly harms their psychological health. From a cycle of disturbing questions like ‘why was it me’ to the feelings of weakness and inferiority, it deteriorates one’s psyche greatly. Hence, all of us must be aware of every aspect of cybercrimes and how we can stay safe from them with the help of cyber insurance companies.
Common Types Of Cyber Security Attacks
There are some prevalent cybersecurity attacks that one should be aware of. All of them are mentioned below.
| Sr. No. | Type of Attack | Meaning |
|---|
| 1. | Phishing | Tricking people into sharing their information |
| 2. | Malware | Attacking using software like viruses, worms, spyware, etc. |
| 3. | Ransomware | Stealing data to ask for monetary gain |
| 4. | Denial-of-Service (DoS) | Overloading a network so that people can’t use it |
| 5. | Social engineering | Manipulating people into sharing personal information |
| 6. | Man-in-the-Middle (MitM) | Intercepts a conversation between 2 parties for personal motives |
| 7. | SQL Injection | Sending malicious SQL code to gain unauthorised access |
| 8. | Digital arrest | Falsely pretending to be an authority to place an arrest through digital measures |
What Is Cyber Insurance?
Cybersecurity Insurance is an insurance policy that serves as a protective and preventive measure against cybercrimes. It helps both individuals and business entities to protect themselves from the vulnerabilities of the cyber world. Cyber insurance policy covers various costs and services like compensation fees and restoration of reputation, in case one may fall prey to cybercrimes.
Who Needs Cyber Insurance?
As the rates of cybercrimes are rising, it is crucial, especially for some people, to have cyber insurance such as:
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Financial institutions: Banks and other financial institutions are very vulnerable to cybersecurity attacks, hence they should have cyber insurance.
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Government organisations: As government organisations have data of the citizens, they need to have cyber insurance companies as well.
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Healthcare providers: As healthcare providers have sensitive data and resources that the attackers can exploit, they should have cyber insurance.
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Educational institutions: They deal with the personal information of innumerable families of their students and staff members.
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Along with these big sectors, individuals and businesses in the small sector should also have cyber insurance as a protective layer against cybersecurity attacks.
Why Is It Important To Have Cyber Insurance?
Everyone must have cyber insurance for a variety of reasons. Some of the major reasons are:
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Protection: Cyber liability insurance serves as a protective shield that would help them even if they fall prey to cybercrimes.
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Recovery: Cyber policy would help individuals recover whatever resources they might lose to the attackers.
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Legal aid: Cyber insurance also covers legal costs and penalties, and makes this frustrating incident as easy for people as possible.
Cyber Insurance Coverage For Individuals
Cybersecurity insurance for individuals covers a wide variety of cybercrimes. The list of those cybercrimes is listed below:
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Identity theft
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Cyber fraud
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Ransomware
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Data breach, and others.
Cyber Insurance Coverage For Business Entities
Cyber liability insurance for business entities covers a wide variety of cybercrimes. The list of those cybercrimes is listed below:
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Data breach
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Ransomware
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Legal fines, and others.
Risks Covered Under Cyber Insurance
Cyber insurance policies cover a wide range of risks to protect people against cybercrimes. Some of the risks covered under cyber insurance policies are:
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Identity theft: Covers recovering and restoring one’s identity.
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Data breach: Helps in recovering stolen data.
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Damage to the system: Covers repair costs in case there is any significant damage to the system.
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Ransomware: Covers any financial losses due to ransomware demands.
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Legal fees: Covers legal fees associated with any investigation done by people or organisations to find the attackers.
Risks Not Covered Under Cyber Insurance
Cyber insurance policies do not cover certain things or events. Some of the risks not covered under cyber insurance policies are:
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Fault: If a cyber-security attack happens due to an individual’s or an organisation’s member's mistake.
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Weak security: If a cybersecurity attack happens due to poor security of systems.
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Prior attacks: If the individual or business entity has faced a cybersecurity attack before purchasing the cyber insurance policy.
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Insider attack: If an employee of a business commits a cybersecurity attack.
How To Raise A Claim For Cyber Insurance?
One can file a claim for their cyber insurance by following the steps mentioned below in detail for one’s better understanding:
Step 1: After the event, please contact your insurance agency.
Step 2: File an official complaint with all the necessary details, like the description of the incident, date, type, etc.
Step 3: Attach any supporting documents as evidence, like phone call records, any mail or SMS, etc.
Consequences For Businesses Of Not Having Cyber Insurance
There can be severe and many severe vulnerabilities that businesses might be open to without cyber insurance policies, such as:
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No compensation: Without any coverage of cyber insurance policies, businesses will not be able to receive any form of compensation for the losses they might suffer.
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Disruption in regular work: Business entities won’t be able to work as usual after falling prey to a cybersecurity attack.
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Psychological damage: After experiencing such losses due to cybercrimes, the psychological health of the employees and the employer deteriorates to a greater extent.
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Legal repercussions: There might be legal consequences for businesses that lose their clients due to cybercrimes.
How To Protect Businesses From Cybersecurity Attacks?
A business entity can take several measures to protect its organisation against cybercrimes, such as:
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Cyber Insurance Policy: Firstly, invest in a good cyber insurance policy so that it can cover and protect your business in case of a cyber attack on the business.
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Enhances security: Employ sturdy security measures like firewalls to protect the business against cyber attackers.
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Awareness: Organise workshops or make circulars for spreading awareness about cybercrimes and their forms among the employees.
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Role-defining and monitoring: Define every employee’s role in the organisation and keep a note of what they can access. Also, regularly monitor employees’ work to avoid any insider attacks.
Difference Between Cyber Insurance & Cyber Defence
Cyber threats are increasing every day, making it important to both prevent and manage risks effectively. The table below highlights the key differences between Cyber Insurance policy and Cyber Defence to understand how they work together in safeguarding against online attacks.
| Aspect | Cyber Insurance | Cyber Defence |
|---|
| Meaning | An insurance policy that provides financial coverage in case someone becomes a victim of cybercrime | Ways to protect systems from cyber attacks |
| Purpose | Aims to protect people from cyber attacks | To prevent the occurrence of cyber attacks |
| Coverage | Covers against cybercrimes like phishing, identity theft, malware, etc. | Includes firewalls, antivirus, encryption, etc. |
| Type of response approach | Strategies after the cybercrime has happened | Prevents cybercrimes from happening |
| Managed by | Insurance providers | IT and cyber security teams |
| Overall Impact | Helps in providing compensation | Focuses on strengthening the security system |
Conclusion
Cases of cybersecurity crimes have been increasing by the minute, hence individuals and business entities must invest in cyber insurance policies before it’s too late.
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