Page 40 - Insurance Times April 2020

The cyber insurance market globally is expected to grow at  Cover restoration cost to retrieve data or computer
CAGR of approximately 25% in span of four years. It is program damaged by entry of malware.
designed to guard business from potential risks of cyber-  Claim for damages against third party for privacy and
crime, it is designed to cover fees, expenses and legal costs data breach.
associated with cyber breaches that occur after an Before taking any insurance policy, it is essential to "ask
organisation has been hacked or from loss if information. 
right set of questions for better policies". Some of
questions are - what aspects are covered under cyber
Key stake holder in cyber insurance are insured (the buyer insurance? Is there any overlap with other traditional
of insurance policy), broker (one who acts on behalf of the insurance? Does the policy provide full limit for all
buyer- facilities the buying process), insurance provider ( one coverage? What are the exclusions? Does the policy
who provides the insurance), cyber security service provider offer pre-breach cyber risk assessment? etc.
(tech company who provides cyber risk assessment)
What the insurer must consider for
Why Cyber Insurance is important: wider reach?
Thoughthere are several measures to develop a secure Crisis management solution: Cyber insurance providers must
cyber space but importance of cyber insurance cannot be invest sufficient time & money to develop a comprehensive
ignored because of the following major reason: crisis management solution. They must progress through
 It will help in indemnifying loss incurred due to cyber- waves. They must generate market intelligence to model
attack. risk effectively and enhance underwriting capabilities.
 The insurer may cover several risks that the business
entity might ignore due to lack of awareness. Expanding offers: They should expand their offerings such a
physical cyber system damage, business interruption etc.
 Helps is complying with legislative guidelines.
 Insured can make optimum use of their resources as Target the untapped areas: The risk pattern and risk
they enjoy a sense of protection. management skill may defer from company to company or
industry to industry. MSMEs are highly vulnerable with lack
 Insurer provides consultant services to the insured on of ability to identify the cyber risk and to bear the loss. In
cyber security. order to cater to such segment specialised policy along with

 Prevent reputational loss handholding measure is necessary. Insurers must focus on
segmentation of market.
Types of Cyber risk covered under the Re -defining service process: often it is observed that upon
schemes offered in India: happening of cyber-crime, the response to the incident from

 1ST Party expenses like regulatory investigation the insurer is not satisfactory. It is important that the insurer
charges &fines, lawyer fees, professional charges etc. maintain transparency with the insured about coverage and
process of indemnifying the loss at the initial stage of
 Privacy & data liability contract. Strong cyber response offering to maximize the

 Cyber theft customer experience.
 Business interruption like income loss, system damage, While not to substitute the investment in cyber security and
and restoration costs. risk management, insurance coverage can significantly
contribute to cyber security by facilitating responses to cyber-
What to consider while buying Cyber crimes, offering expert service, and creating awareness.

Insurance Policy? The industry is still at a nascent stage, number of policy
 It is important to check what all threats are covered in recommendations are required which can support the
the cyber insurance policy. It must cover malware development of cyber insurance market and contribute in
protection; indemnify financial loss arising due to email improving management of cyber risk.
spoofing, phishing, and fraudulent online transactions.
Cyber insurance must be among the top in the agenda of the
 Offer protection against reputational loss including Government and other regulatory bodies. Security focussed
alleging defamation and invasion of privacy. progress will aid in developing sustainable economy. 

40 The Insurance Times, April 2020