Cyber insurance for individuals – Should I get it? | #cybersecurity | #cyberattack | #cybersecurity | #infosecurity | #hacker



Digital culture and economy – boon or bane?

After the pandemic, our life has changed significantly in a bittersweet way – partly good and partly bad. Some changes are for short term, and some for the long term. None of us has ever fathomed that we could have video consultations with doctors or order our groceries, including perishables online. Many public services, such as driving license renewal and stamp duty payment, also moved online that we thought was not possible. We meet our colleagues and family on video chats and pay our local kirana stores or fruit vendors using online modes.

The catalytic change we experience today has bought a great deal of convenience to each one of us. It has also significantly increased our risk to cyber-attacks and made us more vulnerable to malicious hackers and fraudsters who are waiting to steal our identity, reputation, and hard-earned money.

According to National Crime Records Bureau (NCRB) of India, more than 50,000 cybercrime cases were reported in 2020 alone. There might be a significant number of crimes that go undetected or unreported as well. Recent reports also reveal a 3-time increase in cyber-attacks in 2020 compared with 2019 in India.

Exercising caution to safeguard our information online has become crucial. The government and regulators are working on making organisations and businesses responsible for keeping our information private and safe. However, we must do our bit to keep our data safe and understand the implications of our online behaviour. We must be aware of various ways in which fraudsters and hackers cause financial, mental, and privacy damages. Looking for ways to reduce the amount of information that we share online and minimise our online footprint, is also crucial.

Is awareness alone enough?

Reducing online footprint and being aware of various cyber-threats and ways to safeguard ourselves may help. However, that might not be enough. Let us think about it a little bit. We buy cars based on our affordability and liking. We are confident of our driving and take good care of the car. We still get auto insurance to safeguard against any unforeseen damages as we are wary of car thieves, rash drivers on the road, and other risks.

Although we do everything possible to keep our information private and secure, some risks are beyond our control. Fraudsters and hackers launch quite sophisticated attacks these days – so much so that viruses and malwares can be purchased today to hack people’s phones and computers. This is also one of the reasons for the three-fold increase in cyber-attacks in India. India’s digital ambition, combined with growth of mobile and internet services, makes Indians the prime target for the foreseeable future.

Similar to auto insurance, cyber insurance is an effective tool to protect us against those unforeseen risks and malicious attacks. Understanding the risks people face online, the Insurance Regulatory and Development Authority of India (IRDAI) has issued guidance for insurance providers in September 2021. The document calls out the need for cyber insurance to provide cover against theft of funds and identity, unauthorised online transactions, email spoofing/phishing/social media cover, cyber extortion cover, etc.

Many options for cyber insurance products are available in India. Personal cyber insurance products usually cover people aged above 18. In some cases, the whole family who stays with the insured person, is covered for various risks, such as financial losses (due to unauthorised transactions), phishing, spoofing, identity theft, reputational injury, cyber bullying, cyber extortion, and malware intrusion. While these individual policies have a sum insured, they do restrict the amount of cover (sub-limits) to a certain type of risks based on the risk profile of that individual. A personal cyber insurance policy helps provide financial compensation to the extent permissible by the policy an individual chooses. The cyber insurance cover typically includes the following:

  • Identity theft: Expenses related to reissuance of identity documents, affidavit preparation charges, and various credit programme charges for re-establishing credit history and correcting records
  • Financial losses due to unauthorised transactions
  • Losses due to reputational damages occurred through wrongful publications
  • Psychologist consultation as required, to manage reputational damage or cyber bullying
  • Data restoration and forensic expenses, including cyber security consulting charges
  • Legal expenses related to initial legal consultation for legal action against a third party
  • Any penalty that you may have to pay to financial institution for missing EMI payment or any similar expenses

Given the numerous risks that we face today in the online world, we should be aware of the threats we face and reduce our online footprint. We also need to have an insurance cover that can support our financial needs in case of a cyber-attack or fraud. Remember, we insure the car not because we drive the car safely, but for unforeseen incidents over which we do not have any control.

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Disclaimer

Views expressed above are the author’s own.

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