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The rapid pace of digitisation and technological innovation keep making the world smaller and more close-knit. As per reports, India already has around seven crore internet users, which is expected to increase to around nine crores by 2025. So essentially, around half the population of the country already has some sort of data in the cyber-space. Moreover, online financial transactions are also on a sharp rise in the country. As per data from the Reserve Bank of India, over 46 billion UPI transactions were recorded in the country in the financial year 2021-2 (FY22) amounting to over Rs 84 trillion. This is a steep rise from around 22 billion transactions worth Rs 41 trillion during the previous year.

With a major part of our lives moving to the cyber-space, it is natural that risks of the cyber kind would also increase, warranting the need for a plan to protect against such threats. Industry data estimates that just this year, over 6.7 lakh cyber-attacks have been reported till June alone. Out of these, over 50,000 cases were of online financial frauds amounting to Rs 167 crore, as per the government data. Out of this, only Rs 11.70 crore could be recovered.

Amid rising cyber threats, it has become imperative to ensure ones cyber security with cyber insurance. Let us understand in detail about this emerging insurance cover that is now available to individuals too.

As the name suggests, cyber insurance is a type of insurance cover that protects individuals as well as organisations against the implications of cyber attacks. Not only does it cover the insured against the financial loss due to the cyber-breach, but it also covers the expenses related to data recovery, privacy investigations, regulatory actions and litigation.

There are different types of cyber-threats that one could be exposed to ranging from phishing to spyware, and even ransomware and distributed denial-of-service (DDoS) attacks. A comprehensive cyber-insurance policy covers all such cyber-assaults.

While business organisations have always been inclined to cover themselves against cyber-attacks through cyber insurance policies, several insurance companies these days offer exclusive covers to individuals for protection against cyber-risks.

Comprehensive plans of this kind cover everything ranging from malware, phishing and cyber extortion to identity theft, cyberstalking, and data and privacy breach by third-party. Most importantly, they cover financial fraud. This is the reason that these days, even banks encourage their customers to go for a cyber insurance policy.

Typically, a cyber insurance policy covers the online loss of money not only from bank accounts and credit cards but also from payment wallets. However, cyber-assaults related to cryptocurrency are not covered under any cyber-insurance plan. Moreover, if the attack happens when the insured is accessing restricted sites, such events are also excluded from coverage.

Apart from covering the policyholder against financial loss and litigation expenses, some of these policies even cover the cost of restoring the insureds computer if it is damaged due to malware.

The good news is that even though these plans provide comprehensive coverage against most cyber-risks, they are not very expensive. Several companies have launched cyber insurance plans which start at a premium as low as Rs 2 per day. Typically, a cyber insurance plan with Rs 1 lakh cover could cost somewhere between Rs 700 to Rs 2,000 depending on how extensive is the coverage. Moreover, there also exists a B2B2C model where employers provide cyber insurance coverage to their employees. Considering the massive and sensitive nature of data in the corporate world, this acts as a mutually beneficial protection cover.

Since we live in a digital era, our lives depend on the Internet. We shop online, book tickets online, pay for college online, and even buy our food online. Businesses are conducted online, plans are made online and when it comes to social media, our entire lives are shared online. So ideally, every individual with exposure to the digital world, which covers almost everyone, should have cyber insurance coverage. However, to put it simply, cyber insurance is crucial for every individual who is not too tech savvy and who does any kind of online financial transaction.

To make it simpler, there are specific plans available in the market for students, working professionals, families, entrepreneurs and online shoppers, providing you with the specific kind of coverage that you may need. For instance, a students cyber insurance plan protects one from threats related to social media, cyberbullying, file transfers and online transactions. On the other hand, a plan for working professionals provides protection against identity theft and malware attacks, apart from covering you against fraudulent online transactions. One can also go for a comprehensive plan, or customise the plan to suit their needs, as many insurers these day offer.

In a nutshell, a cyber insurance policy provides you protection in the online world by safeguarding your losses in case anything goes wrong. By doing so, it offers you peace of mind as you can carry out your online activities without worrying constantly about cyber threats and their financial implications. After all, when you go online, you are constantly exposed to different types of risks. So why take any chances?

The author is Practice Leader Liability & Financial Risk at Policybazaar.com. The views expressed are that of the author.

Read this article:
Your guide to cyber insurance amid rising cyber threats - The Indian Express