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The world has witnessed a rapid digital transformation in the past few years. While this ensured equitable access to products and services, it also raised security risks and concerns in equal proportions.

For most parts, the internet is a democratic space making it easier to get privy to personal information. Worldwide reports affirm that over two in five people feel more vulnerable to cyber crimes than they did before COVID-19. The National Crime Records Bureau (NCRB) stats indicate that 50,000 plus cyber crime cases were reported in 2020. Not to forget, several cases go unreported too.

Identity theft

Things like social media or net banking are an integral part of our lives. However, they also bring along a very real threat to data security and privacy, the breach of which can lead to dire consequences.

For instance, someone can hack into your account, assume your identity and ask your contacts for money or post something that can lead to legal trouble.

Similarly, if your bank account gets hacked and you suffer a financial loss due to an unauthorised transaction, cyber insurance provides a safety net against these risks and may compensate you even in cases where your bank wont.

Cyber-bullying and extortion

With cheap data plans, the internet can turn into a scary place in no time. Reports suggest that India was the third most targeted country in Asia for cyber crimes in 2021.

Its not uncommon to come across cases of blackmailing or extortion by cyber predators. In fact, the cases of cyberbullying and extortion have witnessed a massive upswing after the pandemic.

Ransomware or malware intrusion

Ransomware refers to malicious software blocks access to ones computer. It even threatens to publish vital personal information until a ransom is paid. Cyber insurance covers such risks and shields you financially. Also, if you undergo a loss of data or valuable information, cyber insurance will also provide coverage for its restoration.

In todays digital world, apart from implementing robust cyber security measures, it is equally important to have cyber insurance, should those measures fail. Dont forget to comb through finer details of what your policy might not include or discuss it with your insurer before purchasing the policy.

The author Evaa Saiwal is Practice Leader Liability & Financial Risk at Policybazaar.com. Views expressed are personal.

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View: Identity theft to bullying and extortion, your cyber insurance policy covers these risks - CNBCTV18