Industry-specific Insurance
Cyber Insurance
Cyber Insurance is a specialized policy designed to protect businesses from financial losses and liabilities arising due to cyber threats, such as data breaches, ransomware attacks, hacking, phishing, and other cybercrimes. It provides financial support and risk mitigation for businesses affected by cyber incidents.
With the rise of digital operations, cyber threats have become one of the biggest risks for organizations across industries. Cyber Insurance ensures that companies can recover quickly from attacks and minimize business disruptions.
Why Cyber Insurance is Essential?
- Protection Against Financial Losses – Covers costs of data recovery, business interruption, and legal expenses resulting from cyberattacks.
- Compliance & Regulatory Requirements – Helps businesses meet data protection regulations (such as GDPR, IT Act in India).
- Safeguards Business Reputation – Covers expenses related to public relations and crisis management after a data breach.
- Covers Third-Party Liabilities – Protects against lawsuits from customers, partners, and vendors affected by a breach.
- Essential for All Businesses – No matter the size, all businesses face cyber threats due to increasing digital dependence.
Important Things You Should Note
- Cyber insurance covers both first-party (direct business losses) and third-party (legal liabilities).
- Policies may include incident response teams, forensic investigations, and crisis management services.
- Premiums depend on company size, industry, cybersecurity measures, and claim history.
- Not all policies cover social engineering fraud (e.g., CEO fraud, phishing scams) by default.
- Businesses must maintain strong cybersecurity practices to be eligible for coverage.
What is Covered & What is Not Covered?
Covered
- Data breaches (theft or loss of sensitive information).
- Cyber extortion & ransomware attacks (including ransom payments).
- Business interruption due to cyber incidents.
- Legal and regulatory expenses (fines, penalties, legal defense).
- Forensic investigations to determine the cause of cyber incidents.
- Customer notification & credit monitoring services post-breach.
- Crisis management & PR costs to restore brand reputation.
Not Covered
- Pre-existing security vulnerabilities not addressed before the policy starts.
- Losses from poor cybersecurity practices or negligence.
- Physical damage to IT hardware (covered under property insurance).
- War, terrorism, or state-sponsored cyberattacks.
- Reputational loss without tangible financial damages.
- Intellectual property theft unless explicitly covered.
Frequently Asked Questions (FAQs)
Who needs Cyber Insurance?
Any business that stores, processes, or transmits sensitive data (customer information, financial data, intellectual property) should have Cyber Insurance. This includes banks, hospitals, e-commerce platforms, IT firms, and SMEs.
How is the policy premium determined?
Premiums are based on company size, industry, cybersecurity measures, past claims, data sensitivity, and policy limits.
Can Cyber Insurance help in ransomware attacks?
Yes. Many policies cover ransom payments, forensic investigation costs, and business interruption losses due to ransomware.
Is Cyber Insurance required by law?
No, but many regulations (like GDPR, IT Act 2000, RBI Guidelines) require businesses to protect customer data. Cyber Insurance helps cover compliance costs.
What should businesses do to qualify for Cyber Insurance?
Organizations should maintain strong cybersecurity practices, including firewalls, encryption, employee training, multi-factor authentication (MFA), and regular security audits to get better coverage and lower premiums.
