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How Does Cyber Insurance Safeguard Against Malware Attacks?

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New-age businesses face regular threats from cyber incidents, like malware attacks, which can have devastating consequences, such as disrupted operations, compromised sensitive data, and financial losses. Hence, they must understand how cyber insurance can cover such attacks. But before that, let's understand what cyber insurance is.

What Is Cyber Insurance?

Cyber insurance, or cyber security insurance or cyber liability insurance is an agreement enabling entities to reduce the financial risks of cyber-crime activities, like data breaches and cyber-attacks. The policy transfers the cost of online threats affecting information governance and policy and IT infrastructure to the insurer in exchange for a quarterly or monthly fee. Like insurance against natural disasters and physical risks, these policies keep changing, given the fluctuating and dynamic nature of associated cyber-risks.

How Does Cyber Insurance Specifically Protect Against Malware Attacks?

Cyber insurance for entrepreneurs protects businesses against malware attacks by offering technical support and financial assistance, both during and after the incident. Although cyber liability policies may differ by plan and service-provider, the main areas covered include:

• Cyber insurance covers malware attacks by covering all expenses related to data and systems restoration, remediation, and investigation. Your insurance company may also cover the expenses of the credit-monitoring service for affected clientele, legal services, and losses caused by business interruption.

• Cyber insurance for entrepreneurs offers financial assistance and technical support, such as assistance in incident investigation, help to use security measures to prevent future attacks, and expert guidance on cyber security. Your insurance company may also offer support and resources for handling cyber extortion and ransomware demands.

Traditional insurance plans exclude cyber threats, thus the rising demand for cyber liability insurance as a separate type of coverage. Major customers include stores that handle customers' financial and medical information and companies that accept digital payments.

Businesses looking to qualify for cyber security insurance must have a strong defence to mitigate cyber risk. This may include measures like robust firewalls, regular software updates, sensitive data encryption, and training employees in cyber security awareness. By taking these preventive steps, organisations can reduce their risk profile, thus lowering their cyber insurance premiums.

Cyber Insurance Claim Procedure

As with other insurance coverage, thoroughly review the policy and understand the terms and conditions to raise the claim request in time. Though the process of raising a cyber liability insurance claim may vary from one insurer to another, the common steps are summarised below:

Step 1: Identifying a Security Breach

Third-party security breaches can happen at any time, involving an unknown organisation or person who breaches your private information. Regardless of the model, all devices are susceptible to such attacks, and you must identify them as they occur.

Step 2: Filing an FIR or First Information Report

When you identify the security breach, file an FIR or make a legal complaint at the nearest cyber security department or police station. Submit a copy of this complaint to your cyber liability insurance company.

Step 3: Notify the Insurer

Ensure you notify your insurer about the claim within one or two days of the deadline specified in your coverage. Competent insurance companies even provide 24/7 customer support to help their clients with the entire process and resolve their queries.

Step 4: Submit All Requested Documents

After intimating the insurer of the incident, share all documents requested by the insurance company alongside the claim form. This usually includes the FIR copy or photocopy of the complaint.

Step 4: Forensic Verification

Once you are done with the above steps, your insurance company will check all documents to determine the authenticity of your claim. Your insurer will also get the claim verified forensic and authenticated by experts to determine whether it is valid.

Step 5: Claim Settlement

Once the insurer gets your claim verified by a cyber expert or forensic team, you receive the insured amount within a few days based on your policy's terms and conditions.

Issues Excluded by Cyber Security Policies

Issues excluded by cyber security policies are as follows:

• Preventable security problems caused by humans, like careless mishandling of digital assets and poor configuration management

• Prior or pre-existing cyber events or breaches, like incidents before the coverage was bought

• Purposeful malware attacks do not cause infrastructure failures.

• Insiders or employees cause cyber-attacks

• A company's failure to correct a known vulnerability

• Loss of intellectual property value, like trade secrets, proprietary details and other invaluable intangible assets

• Expenses incurred in improving technology systems, including security hardening in applications or systems

Conclusion

Given a cyber-attack's technical and financial impact on a business, contacting an insurance company specialising in cyber security insurance becomes crucial. Expert agents working for such companies can guide you to the right affordable insurance for your cyber risk.

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

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