Cyber Insurance Coverage Checklist: Check What You are Paying for

Posted on: Apr 4, 2022 | 3 mins | Written by: HDFC ERGO Team

Cyber Insurance Coverage Checklist: Check What You are Paying for

Cyber frauds have long been a known hazard to many, but the frequency of such digital crimes in India has recently increased dramatically. With such growth of cyber-attacks, most people will find that obtaining cyber insurance is a must. Let's go over the crucial cyber insurance coverage checklist to assist you to protect yourself from these fraudulent operations.

Cyber Insurance Coverage Checklist

It's no surprise that most individuals don't understand cyber insurance, its coverage, limitations, or how the policy operates. To assist interested clients in making an informed selection, here is a checklist they should use when comparing cyber insurance plans online.

The checklist is divided into 3 distinct sections, namely:

● Policy Inclusions

● Policy Restrictions

● Policy Exclusions

Let’s go through them one by one.

A. Policy Inclusions

You should first carefully analyse the inclusions of a cyber insurance plan, as they are the areas covered by your current insurance provider. These inclusions can also be referred to as clauses. Your cyber insurance coverage should cover these basic following factors:

1. Financial loss as a result of phishing or email spoofing.

2. Any unauthorised online transactions involving your e-wallet, bank account, debit card, or credit card.

3. Loss of data, software programmes, and systems, among other similar issues.

4. Any business disruption caused by a cyber assault.

5. Theft of data.

6. Cyber-stalking.

7. Media liabilities or social media liabilities.

8. Any losses incurred as a result of IT theft.

9. Theft of one's identity.

10. Costs and losses associated with identity theft protection.

11. A third-party data leak and privacy results in the loss of personal data.

12. Any damage or loss caused by cyber-terrorist actions.

13. The cost of attending cyber extortion court summons.

14. Data loss or irreversible damage to your organisation's data.

15. The cost to replace, repair, or upgrade your computer system.

16. Business Continuity Issues.

B. Policy Restrictions

When acquiring a cyber insurance plan, you will see that the plan's coverage include sub-limits or restrictions. These phrases might differ from one cyber insurance provider to the next. This makes it extremely important to understand these requirements. Sub-limits are restrictions on the level of protection provided to cover a specific type of loss or damage. Make sure to read and understand the conditions listed in your policy insurance document to avoid future claim rejection concerns.

C. Policy Exclusions

1. Any property loss or physical harm.

2. Intentional or deliberate loss.

3. Data collection without authorisation.

4. Online Trading or Cryptocurrency losses.

5. Claims about offline activities.

6. Unexplained loss of any kind.

7. Any previous loss that you've sustained.

Please keep in mind that most cyber insurance policies do not cover the following exclusions. However, they are constantly subject to change based on the insurer picked. You should always evaluate these factors before deciding whether or not a particular cyber insurance policy completely protects your interests.

How do Cyber Insurance policies work?

Anyone may get cyber insurance for a set amount of coverage. However, while resolving your insurance claim, the proportion of the liability limit will be used to determine the amount of compensation. For instance, in the case of a financial loss caused by phishing, the percentage of liability limit may be set at 25%. As a result, even if the customer has a high level of coverage, the amount of claim will be just 25% of the insured sum.

However, it is important to understand that policyholders can only make one insurance claim for one cyber breach at a moment. If someone is facing numerous cyber-breaches, they can pick one to file a claim against. But, there is no limitation to the claim numbers that can be filed within the policy tenure.

Conclusion:

With the increasing digitalisation and dependence on technology, a business’s information has become its asset and this means a company’s worth is related to the amount of sensitive data it possesses. That is why insurers have raised the bar for cyber insurance coverage by constantly expanding their base coverage. Cyber insurance helps you protect your business and its assets against a range of cyber-related risks, including financial damage due to cyber-crimes such as data theft, identity theft and fraud. A provision for confidentiality, integrity and availability of information is part of all the cyber policies today. So, you need to choose one that covers all your needs for security and confidentiality online.

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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