Cyber Insurance: A Necessity for One & All

Cybercrimes and digital scams are skyrocketing in India. The frequency of digital frauds rose by 24% in the first four months of 2021 according to a report by TransUnion. As the number of digital users increased, the count of cyber frauds hit record highs. According to a report by Avast Threat Labs, more than 1.46 million ransomware attacks were blocked every month in 2021. The shift to work-from-home, where employees use and share WiFi networks is also a big target for internet fraudsters.

How will one stay safe in such a situation? Going off the grid and staying in a silo is not an option. Every aspect of our lives is now digitized, for convenience and ease of doing business---from digital payment apps for day-to-day transactions to online meetings and data sharing.

Source: NEWS18

Such a situation necessitates the importance of having a safety net to fall back on, in case of a breach in professional data or personal information. And the best way to protect yourself from such a situation is to have suitable Cybercrime Insurance policy coverage.

Defining Cybercrime Insurance

Cybercrime insurance is designed to protect organisations and individuals from cyber attacks, phishing, and other online frauds. It covers the legal costs involved in the remediation of the attack and third party coverage in case of litigation by alleged injured parties.

Policy coverages often have a sum assured of ₹1 lakh with an annual premium that lies between ranges ₹650 to ₹700. It can also be noted that unlike life insurance, health insurance, or term insurance policies, the premium does not depend on the age of the applicant.

The Importance of Cyber Insurance

Fraudsters around the world are plotting new ways to scam unsuspecting individuals of their data and sensitive details. A recent example can be given of the flood of messages that arrived during the second wave of the COVID crisis in India in the form of oxygen scammers. The fraudsters targeted those that needed oxygen delivery and medicines by taking advanced payment and disappearing. There have also been cases where fraudsters have scammed people by asking for a payment gateway or digital wallet information.

Those between the age of 55 to 64 years of age are often duped with their banking and finance details, while those younger have been the victims of close to 5.9 million tech malware. A cyber insurance policy will help mitigate these crises in the following ways:

1. The policy will cover financial costs that are incurred as a result of hacked social media accounts, malware-related data theft, and fake email attacks.
2. Legal costs to prosecute the perpetrators will be taken care of by the policy.
3. Losses from illegal phishing activities and swindling of money in debit or credit card transactions, and even eCommerce checkouts will be covered.

Other areas that cyber insurance will help you with are digital stalking, identity theft, introduction of malicious software like Trojans, tainting of social media reputation, and data breaches.