Overview

The importance of cyber insurance was first acknowledged by global enterprises way back in 2003 just after the California Security Breach and Information Act came into effect. Major Cybercrimes that involve malware, ransomware, phishing, distributed denial-of-service (DDoS) attacks and even malicious insider threats were the concerns for organizations. Securing their data assets was the priority. In order to impart personalized help and offer financial security against imminent risks, cyber risk insurance and cybersecurity insurance got on-board with the objective of helping organizations against unforeseen risks.

Cyber Insurance is a product designed to help businesses hedge against the potentially devastating effects of various cyber threats. In the past few years, data breaches have led to major penalties and financial losses since global compliance regulations have been extremely stringent. In almost every industry we find that several large and mid-scale organizations have faced the wrath of this huge penalty for non-compliance or loopholes in compliance. That is why cyber insurance can be a smart precaution for any size business.

What does it cover?

Cyber insurance generally covers the liability for a data breach that involves sensitive personal information (eg. PAN numbers, card details of accounts, bank account numbers, health records et al.). Besides the typical legal expenses, it helps to –

  • Restore personal identities of affected customers
  • Repair affected systems and devices
  • Recover compromised data

Why is it required?

Today, every business requires insurance that covers risks of natural disasters, physical risks or even financial instabilities. Similarly, cyber insurance covers cyber risks with a highly competitive monetary margin. In the case of massive data breaches, organizations might not always have adequate resources or finances to recuperate the losses. That is when cyber insurance is required because it can offer all the financial support and does not allow any kind of disruption in the business process.