Cyber threats have grown over the years, especially in the post-Covid times when many people work from home. Instances of individuals suffering financial losses due to cyberattacks have been rising.
All of us use the Internet for shopping, banking transactions, social media, and communication, so it has become necessary for individuals to have cyber insurance coverage in place.
First, let us look at some numbers. According to the Indian Computer Emergency Response Team (CERT-In), there were 14 lakh incidents of cyber threats in 2021.
The most dangerous thing about cyber threats is that these incidents are detected after they have taken place. Cyber threats can be of various kinds. It may include identity theft, cyber-stalking, malware attacks, phishing, email spoofing, and cyber extortion.
Let us look at some of these threats in more detail.
Identity theft: Scamsters may use your name and personal information to obtain credit, loans, and so on.
Phishing: Here, one may click on a spurious link that appears like a legitimate website and be fooled into entering sensitive information.
Cyber-stalking: Someone on the Internet may harass or frighten you by sending different types of communication.
Cyber extortion: A fraudster may threaten to release sensitive or private information in exchange for a ransom.
Cyber insurance covers you from various implications of cyber threats. “It will cover you not only from any financial loss due to cyber threats but also other associated expenses due to data restoration, any regulatory action or litigation,” says Sanjay Datta, chief underwriting of reinsurance, claims, and actuarial at ICICI Lombard.
In case you go through any stress or anxiety due to a cyber threat, the insurance will cover the cost of counseling by an accredited psychiatrist. It will also cover the cost of an IT consultant to gauge the extent of your loss.
“Premium for a cyber insurance policy would depend on its coverage. The corporate average premium for Rs 1 crore limit is around Rs 60,000 to Rs 70,000. The retail average premium for Rs 10 lakh is around Rs 2000,” adds Datta.
However, there are some exclusions one needs to be aware of. If you deliberately hide information from the insurance company when purchasing the policy, the insurance company will not assess your loss. Any risk of unsolicited communication, like telephonic marketing, video recording, etc., is not covered. Any physical injury or bodily damage also does not fall under the policy's purview.
