Online frauds through malware, phishing, identity theft and other online threats such as cyber bullying are on the rise year after year across several countries including India. Since the digital revolution the instances of cyber fraud have been on the rise and a quantum jump in such incidents was seen during the Covid-19 pandemic as the need for digital payments increased.
To ensure monetary safety against any kind of cyber fraud, the Insurance Regulatory and Development Authority (IRDAI), the apex insurance regulatory body in the country, and insurance companies have introduced cyber insurance policies offering cover against monetary loss through cyber fraud. Both companies and individuals can get a cyber-insurance policy.
What is Cyber Insurance?
Cyber Insurance policies offer protection against losses due to a network-based event to a company or individual policy holders. It is designed to protect policyholders from the effects of cyber-attacks and risk exposure by covering costs after a cyber-attack or security breach has happened. Cyber Insurance covers the expenses and legal costs associated with cyber frauds, which may involve hacking of systems, data theft and loss of important information, cyber bullying etc.
What are covered under personal cyber insurance plans?
The IRDAI has outlined the following losses that need to be covered under the personal cyber insurance.
Theft of funds: Losses due to cyber incident or hacking of bank account, credit/debit card and/or mobile wallets by a third party are covered by personal cyber insurance policies
Cyber stalking/bullying: Expenses to investigate and prosecute the online stalker are covered.
Malware/ data restoration cost: Data restoration costs due to loss through malware are covered.
Phishing: Financial losses due to phishing attacks, including expenses to prosecute perpetrators, are covered.
Cyber extortion: Protection against extortion of money by cyber criminals is provided. Expenses to prosecute perpetrators are also covered.
Identity theft: Legal defence costs for claims against insured by third or affected party due to identity theft or fraud are covered including expenses to prosecute perpetrators and transportation cost.
Media liability claims: Defence costs in third party claims due to defamation or invasion of privacy following the publication or broadcasting of any digital media content are covered.
Social media: Defence costs for claims against insured by third/affected parties due to hacked social media accounts, including expenses to prosecute the offenders are covered.
Unauthorised online transaction: Fraudulent use of bank account, credit/debit card and e-wallet by third parties to make online purchases are covered.
E-mail spoofing: Financial losses due to spoofed e-mail attack, including expenses to prosecute perpetrators, are covered.
Data breach and privacy breach: Defence costs and damages due to claims by third parties for data breach and/or privacy breach are covered.
Different policies may contain add on covers for extra benefits such as counselling after a crime, etc. Some plans may have sub-limits for specific cybercrimes and deductibles. However, the newer plans are doing away with these limits.
How to get a Personal Cyber Insurance policy?
Individuals above the age of 18 are eligible to purchase a Cyber Insurance policy. Leading private insurance firms such as HDFC, Bajaj Allianz, ICICI Lombard etc. are offering such insurance policies. However, the minimum age to purchase certain policies is 21 years.
What is the cost of Personal Cyber Insurance?
The premium for a policy with Rs 1 lakh cover for an individual can range from Rs 700 to Rs 3,000. The premium amount depends on the kind of cybercrimes covered under the policy and the services offered.
The annual premium for Rs 1 lakh plan from Bajaj Allianz Individual Cyber Safe Insurance policy is Rs 781. ICICI Lombard Retail Cyber policy costs Rs 2,708 annually. HDFC Ergo Cyber Sachet plan for a working professional, costs about Rs 984 annually.
All plans are renewed annually and cover multiple devices. Some provide the option of including family, usually comprising parents and two children.
What are not covered?
Losses incurred through cryptocurrency, gambling, fraudulent conduct, or unauthorised collection of data, accessing restricted sites, cost of upgrading devices are not covered under the policies. Also, physical injuries arising from cyber-attacks or frauds are not covered.
How to raise a claim?
To raise a claim, the policy holder must inform the insurer immediately. An FIR has to be filed with the police and the cyber cell and a copy of the FIR with other relevant documents such as proof of reporting the crime to bank or relevant body, invoices for costs and fees incurred in safeguarding devices etc, should be submitted to the insurer. The settlement may take 20 days or a month depending on the individual cases.
(Edited by : Sudarsanan Mani)
First Published: IST