Several companies are considering purchasing cyber insurance to protect against huge financial losses, especially after the prevalence of large-scale cyber attacks, including recent ones against SolarWinds and the US colonial pipeline.
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Large-scale cyber attacks, such as the recent SolarWinds and US Colonial Pipeline attacks, have highlighted the growing threat of high-profile hacks on Internet users around the world. Cyber attacks top the list of man-made risks around the world, according to the World Economic Forum, and research firm Cybersecurity Ventures has predicted that cybercrime could cause $ 6 trillion in damage. ‘by the end of this year. Several companies have turned to cyber insurance to protect themselves against huge financial losses.
What does cyber insurance cover?
Typical cybersecurity insurance, or cyber risk insurance, is designed to help businesses protect themselves against potential cybercrime, including ransomware, malware, and denial of service (DDoS) attacks. Some policies may also cover losses incurred by other hacking methods such as cyberstalking, email spoofing, phishing, and cyber extortion that can compromise a network and expose sensitive data. Claims could also include the cost of privacy investigations or legal action following an attack.
In addition, individual and company plans should also cover the cost of the hardware, such as in the event that a cyber attack causes the computer to burn due to heavy CPU usage or dissipation system failure. thermal, said Joydeep Roy, global head of health insurance at PwC The Hindu.
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According to Rohan Vaidya, Regional Sales Manager-India at CyberArk, cyber insurance policies generally do not cover potential loss of future profit and value due to intellectual property theft.
“Anyone connected to the Internet should consider purchasing cyber insurance,” according to TL Arunachalam, director of cyber and emerging risks practice at Bharat Re-Insurance Brokers. This applies to both individuals and businesses that transact online through banking services or have some form of internet presence, he said. The Hindu.
How much does a policy cost?
Companies typically opt for policies between 40 crore and 200 crore as the sum insured, and the typical premium is around 1-4% of the sum insured, Rohan said.
The cost of a cyber insurance policy depends on several factors. Premiums are likely to be high for companies in certain industries like pharmaceuticals, healthcare, hospitality and banking because they hold sensitive customer information and are prone to vulnerability, according to Arunachalam.
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Preparing for cyber attacks will also determine the cost of a policy. If a business has weak cybersecurity defense systems and incident response techniques, the maximum probable loss (MLP) is likely to be higher, thus increasing the police premium. “It makes sense that companies invest in tools and / or subscribe to professional services to strengthen their cybersecurity policy, architecture, defense and decoy systems as well as the crucial element of rapid and expert response mechanisms. incident, ”noted Joydeep, indicating cyber insurance is no substitute for inadequate cyber attack prevention practices. “Seriousness about possible cyber attacks and a company’s determination to defend its data and resources will also play a role in determining premiums and claims payments for cyber insurance,” he said. added.
While cyber insurance has been a topic of discussion in India for the past few years, only 15-20% of Indian businesses are actively considering protecting their risks through insurance, Arunachalam said. “The percentage of businesses already insured will be much lower,” he said. However, automation, the Internet of Things and the current state of work from home are expected to drive the adoption of cyber insurance in India in the coming years, CyberArk’s Rohan noted.