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Cyber Insurance Claim Process in India: Document Checklist

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According to CERT-In, i.e. Indian Computer Emergency Response Team, there were 11,58,208 incidents of cyber-crime reported in India in 2020, increasing to 14,02,809 cases in the year 2021. And in just two months into the year 2022, there were 2,12,485 incidents which were more than the same in the entire year of 2018. These were just the cases in India and just the cases that were reported. Cybercrimes have constantly been increasing, and the figures are troublesome and shocking.

Everything has two sides and if it is good, there is bad too. This is the case with the internet. The Internet has shown humanity a very smart future. However, this smart future has a dark side to cybercrimes. The intensity of this can be stated by the fact that the number of cybercrimes in just the first two months of 2022 was more than reported cybercrimes in the entire year of 2018.

Now, is there a way to safeguard ourselves from these attacks? Yes, Cyber security insurance is the safety net that can help us with a backup in case of financial loss incurred by these cyber-attacks and cybercrimes.

What is Cyber Security Insurance?

Cyber security insurance helps ensure the safety of the users from loss and damage, which often is the result of illegal leaks or disclosure of financial and personal data online. This helps in not just safeguarding your financial interests but also helping you psychologically when your personal and sensitive data is breached.

The use of the internet in India has increased manifolds recently. Online shopping, net banking, social networking, and many such online activities increase the chances of the user falling victim to digital fraud, cyberstalking, hacking and online thefts. Cyber security insurance creates a safety net for a user against such criminal acts online.

Who is Eligible to Opt for a Cyber Security Insurance Plan?

If you are above the age of 18 years and a citizen of the country you live in, you can buy cyber-security insurance.

How to Claim a Cyber Security Insurance Plan?

The claim and settlement process of cyber security insurance is easy and quick. Let us see the steps required:

1 File a police complaint at a police station and/or a cyber-cell department as soon as you become aware of a probable cyber fraud or crime.

2 Inform the insurance company about the same.

3 The written format has to be followed while filing for a claim.

4 Make sure to submit the claim within 90 days.

5 Evidence of loss must be submitted to the company.

6 The claim is then verified by an investigator referred by the insurance company.

7 After verification, if the claim falls in the category of insured, the beneficiary account receives the payment.

8 But, in a case when a claim cannot be accepted, the claimant is informed of the rejection.

9 In a case a claimant feels the resolution was not to their satisfaction, they can ask for mediation.

What is the Checklist of Documents Needed to File a Cyber Security Insurance Plan?

In order to claim for a cyber insurance plan, you need to provide certain documents such as:

1 Claim form, duly filled in and signed

2 Copy of the FIR from the police reports made earlier.

3 Forensic reports (if any)

4 Copy of invoices for expenses against IT Consultant Services cover

5 Proof of loss incurred by you

6 Details and evidence of loss like people involved, mitigating practices, dates, and acts or circumstances.

7 Copy of invoices for expenses against restoration costs

8 Proof of personal data belonging to you

9 Screenshots of findings

10 Copy of legal notice and summonses from a court (if any)

11 Any other specific document related to the nature of loss

How Long Does it Take to Pay Out a Claim for Cyber Security Insurance?

To know how long it takes an insurance company to make the payments against the claim, let us first discuss the life cycle of an insurance claim in steps:

1. Step 1- The breach of data or privacy by a third party becomes evident to you.

2. Step 2- You file an FIR or a written complaint with the cyber cell department and the police station without losing time.

3. Step 3- You inform the insurance company about the claim at the earliest possible, most probably within 2 working days.

4. Step 4- As discussed above, along with informing the insurance company about the incident, you also need to submit the relevant and necessary documents from the above checklist.

5. Step 5- Now, your part in the play is complete, and the part of the insurance company starts. They will verify the claim by consulting forensic experts.

6. Step 6- Once the verification is done, the insurance company will initiate the process for claim settlement and make your payment as per their policy. This will happen most probably within 5-7 working days of receiving the cyber expert report and all documents.

Instances Where You Cannot Claim Cyber Security Insurance:

Cyber security insurance policies, like any other policies, have restrictions, sub-limits, and complete exclusions too. These expressions differ between all the cyber insurance providers. This is why you must understand these phrases and expressions and the requirements beforehand to avoid any misunderstanding or issues later. Read the documents properly and understand the inclusions, exclusions, restrictions, and sub-limits mentioned in your policy documents to ensure no future claim rejections based on technicalities.

The List Below are a Few Common Policy Exclusions to Keep an Eye for:

1 Claims about offline activities

2 Data collection without authorisation.

3 Any previous loss that you've sustained

4 Online Trading or Cryptocurrency losses.

5 Intentional or deliberate loss.

6 Unexplained loss of any kind.

7 Any property loss or physical harm

Conclusion

With the increase in the usage of the internet, the chances of the power being abused have increased manifold. This increase in the cases of cyber threats has forced people and organizations across the globe to take measures to shield themselves. Due to the benefits that come with the claim, a lot more people have now started to opt for cyber security insurance.

Cyber security insurance makes sure you are safe against cyber-attack incidents and cyber hacking, along with first and third-party liability coverage. Cyber security insurance not just covers the losses incurred due to the attacks but also helps people and organisations cover the cost of legal proceedings.

The cyber security insurance is an ever-changing business that has made sure to keep including the newest ways cybercriminals have been affecting society. This only adds to the fact that cyber-security insurance in the present world of increasing internet users and businesses is no longer an option but is a necessity.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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