With the advent of digitalization, the rise in threats of cyber-attacks comes in. We have reported large figures in cases relating to cyber-attacks both in the corporate sector and among individuals as well.
Cyber-attacks have played a major role in bringing cyber insurance to the core. Cases of rising cyber fraud are not only limited to companies but also individuals. Therefore, cyber insurance is a considerable option.
An immense rise in the cyber insurance market has been seen globally. The figures are estimated to reach USD 20 billion by 2025. Indian base for cyber insurance is around Rs. 500-700 crores.
Several cyber insurance providers cyber insurance to cover individuals and companies as well. A few cybercrimes coverage included in the cyber insurance policy are social media liability, cyberstalking, IT theft loss, cyber extortion, and many others.
A majority of cases reported globally and in India are related to e-mail based attacks, malware or ransomware, and phishing attacks.
What is Cyber Insurance?
The term cyber insurance is synonymous with cyber risk insurance and cyber liability insurance coverage. A cyber insurance policy helps an organization to continue to run even in case of a security breach. It acts as a friend in disguise that offers a helping hand in times of crisis.
Cyber insurance acts as a helping hand to mitigate the exposure of risk by offsetting the costs involved as it consists of various policies of recovery in case of a breach regarding cyber security.
Why is Cyber Insurance a Must for Every Company?
The reports of Ponemon Institute’s Cost of a Data Breach says that data breach costs $3.9 million on average. It includes remediation, continuity costs, fees, etc.
Cyber insurance comes into light as a friend in disguise that assures an organization needs not to bear all these costs alone. Cyber insurance helps to get prepared to respond effectively in case of a data breach.
The 2019 survey report by Marsh and Microsoft mentions that about 47% of businesses have cyber insurance cover. Apart from this, 89% of businesses are in confidence that their cyber insurance policies cover the costs of any cyber event that might occur. These stats depict an increasing number of organizations buying cyber risk insurance.
Cyber risk insurance is important for risk mitigation. A single cyber-attack on an unprepared company can put it totally out of business. Therefore, the implementation of a cyber risk management program is a must for all small and big organizations. The program must include at least the following three things:
- Notices the risks to which an organization might be exposed to
- Helps a company prevent breaches
- Helps the company to recover from a possible breach
Following are a few reasons that make cyber insurance a must-have:
- Not only the big businesses but also the small companies are targeted by hackers. Small businesses are at a greater risk instead, as they do not have proper financial resources to bounce back after a cyber attack or data breach.
- Data is a critical business asset that must be protected. The value of data is as important as the device in which it is stored. A cyber policy offers coverage for data restoration in the event of a breach of data.
- The organization might face harsh penalties in case of loss of credit card data. According to stats, credit card crime is a $7.5 billion industry worldwide and growing. Even the smallest retailers are exposed to this risk.
- A ransomware attack, a computer virus, or an untrustworthy employee may shut systems down; a cyber insurance policy can cover your losses including the compromise with the data or the device in which it is stored.
- Cyber insurance also covers costly claims such as defamation, breach of information, copyright infringement, etc.
- Cyber Insurance policy offered by the companies ensures public trust and a reason to the customers to remain connected and save a large number of future sales resulting from customers that the company might lose to its competitors.
- To ensure financial safety against any kind of cyber fraud, as any kind of breach ultimately leads to a lot of expense. Insurance companies offer cyber insurance policies that also cover any sort of monetary loss.
Any business venture that stores data online or in any way use technology is at risk of a cyber-attack. The outcomes can be shattering. Stats mention that the average cost to resolve a data breach issue is about $7 million.
Cyber insurance helps the company recuperate after a data breach. It is an essential option that includes costs of business interruptions, legal fees, revenue loss, public relations expenses, equipment damages, and legal costs. Cyber insurance plays a vital role in shielding the organization in the long run before a breach occurs.
With Indian businesses getting online, cyber insurance in India is the need of the hour with the proliferating cases of online breaches. Cyber frauds have taken a higher jump during the Covid-19. It has experienced a rise with the increase in digital payments.
Cybercrime is the world’s fastest-growing crime, cyber insurance is the solution.
What is cyber insurance?
Cyber insurance is insurance that covers your liability and protects your company from Internet-based risks.
What are the benefits of cyber insurance?
Cyber insurance provides Data breach coverage, Legal support, and protects you from phishing, email spoofing.
What do cyber insurance policies cover?
Most cyber insurance covers any data that has been lost, damaged, stolen or corrupted due to the security breach.