In today’s digital age, the threat of Cyberattacks is increasing by the day and the number of Cyber Incidents has been on an upswing since the last few years. The cost of cyberattacks is also increasing every year. Also, big companies and small companies alike have been victims of cyberattacks in last few years. A Cyberattack incident results in business disruptions, loss of reputation and customers and negatively impacts a firm’s profits.
Thus, it is imperative for businesses to secure their companies from the Cyberattacks by implementing robust Cybersecurity measures and purchasing a Cyber Liability Insurance Policy which will reimburse the losses in case the company is a victim of Cyberattack.
What is a Cyber Insurance Policy?
A Cyber Insurance Policy protects the insured company against losses due to a breach of network systems, data breaches, phishing scams and ransomware attacks. A Cyber Insurance Policy is meant to protect the business from financial losses because of a Cyberattack. Cyber Security Insurance Policies cover expenses incurred for Legal Fees, Forensic Investigations, Public Relations Expenses, Privacy Breach Notification Costs to clients etc.
What does a Cyber Insurance Policy Cover?
Privacy Breach: A Cyber Insurance Policy also pays the Defence Costs and Damages against the Insured because of a breach of Personal Information, Commercially Confidential Information, Employee Information and Information Outsourced by Policyholder.
System Damage: A Cyber Insurance Policy also pays Rectification Costs incurred in repairing, restoring or replacing any of the Policyholder’s Computer Records that have been destroyed, damaged, lost, altered, distorted, erased or mislaid as a result of any Cyberattack.
Business Interruption: A Company which is a victim of a Cyberattack faces disruption of business operations leading to a loss of revenue and profits. Cyber Insurance Policy Coverage pays for the loss of profits faced by the business on account of a Cyberattack.
Computer Virus Transmission and Hacking: A Cyber Insurance Policy also pays the Defence Costs and Damages against the Insured as a result of a Third Party’s Financial Losses arising from a) a Hacking Attack or Virus that has emanated from or passed through the Policyholder’s Computer Systems b) a Hacking Attack or Virus that prevents access to the Policyholder’s Computer Systems’ by Third Parties authorised by the Insured to gain such access; or c) the loss or theft of the Policyholder’s data or data for which the Policyholder is responsible, arising directly from a Hacking Attack or Virus.
Multimedia Liability: A Cyber Security Insurance Policy pays for Defence Costs and Compensatory Damages resulting from claims on account of Defamation, Invasion for Right to Privacy, Plagiarism, Copyright Infringement, arising from the Insured’s Internet/Email Content, Third Party Digital Content downloaded, shared or distributed from the Insured’s Computer Systems.
Cyber Extortion Cover: Sometimes, hackers breach the network systems of an organization and encrypt the data of the company and don’t release the same until a hefty ransom is paid. In such a case, a Cyber Security Liability Insurance Policy will also pay for the Cyber Extortion (Ransom) demands under the E-Threat cover of Cybersecurity Liability Insurance Policy.
What are the benefits of a Cyber Insurance Policy?
Forensic Experts: A benefit of Cyber Liability Insurance Policy is that after a data breach incident, it becomes necessary to hire forensic experts to determine the cause and loopholes of the networks systems. These forensic experts cost millions of rupees in fees which can be reimbursed by a Cyber Liability Insurance Policy.
Improved Cybersecurity: Another benefit of a Cyber Insurance Policy in India is that it leads to improvement in Cyber Security Measures implemented by the company as Insurance Companies insist on adoption of best practices as a pre-condition of granting Cyber Insurance Coverage. This makes the Insured firm less vulnerable to Cyberattacks.
Financial Protection: The third benefit of a Cyber Insurance Policy is that it is extremely beneficial in case of a big cyber security incident. A comprehensive Cyber Insurance Policy will help in ensuring recovery of business by paying for losses such as Forensic Costs, Ransomware Payments, Credit Monitoring Costs, Notification Expenses etc.
Data Restoration Costs: Data Restoration Costs refer to costs incurred in restoring or retrieving data which has been destroyed, damaged or lost following a Cyberattack. The cost of restoring such data might be very high and a Cyber Insurance Policy pays for such Data Restoration costs following a Cyberattack.
Cover for Reputation Damage: Damage from a Cyberattack is not only limited to breach of company’s network systems but customer’s whose data has been leaked might become wary of working with the company again as they would be worried about the security of their confidential data. In such a case, a Cyber Security Insurance Policy would pay for public relation expenses as well to rectify the company’s image.
Peace of Mind: A Cyber Insurance Policy offers peace of mind and alleviates concerns about potential cyber threats. Organisations do not have to worry about the financial effects of a Cyberattack. Additionally, clients also get confidence to share their sensitive data with the company.
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Today the risk of cyberattacks cannot be ignored and it has become imperative that organization take proactive measures to secure themselves from the impact of a Cyberattack. Being unprepared, leaves you open to the risk of crippling financial losses.
Companies should follow best practices and conduct employee awareness trainings, have cybersecurity policies in place and also have a Business Continuity Plan in place. In addition, companies should invest in a Cyber Insurance Policy which will ensure that the business remains operational following a Cyberattack and provides reimbursement for expenses incurred in hiring forensic experts, Data Restoration Costs, Defence costs and damages to be paid following a Cyberattack.
The cost of Cyber Insurance Policy is also reasonable.
- What is a Cyber Insurance Policy?
- What is Cyber Threat or Cyber Risk?
- On Security Insurance Necessity For Businesses
- What does a Cyber Insurance Policy Cover?
- What kind of losses does a Company suffer on account of Cyberattacks and Security Breaches?
- What is the average Cost of a Cyber Incident?
- What are the First Party Liability Coverages under a Cyber Liability Policy?
- What are the Expenses Covered under a Cyber Liability Policy?
- What are the Third Party Liability Coverages covered under a Cyber Liability Insurance Policy?
- Cyber Security Insurance Policy (Why Does It Matter?)
- What are the Exclusions under a Cyber Liability Insurance?
- Cyber Insurance Policy Cost (What is reasonable?)
- Get Best Quotes for Cyber Insurance Policy with Qian