Even as companies rushed to choose cyber covers, the focus on personal insurance only increased after insurance regulator Irdai listed guidelines for the same in September of Last year. Unlike the corporate coverage offered by most insurers, very few companies currently offer personal or individual cyber insurance. Some of them include HDFC Ergo General Insurance, Bajaj Allianz General Insurance, ICICI Lombard General Insurance, Future Generali India Insurance, and several others are releasing products.
What protection does it offer?
“Cyber insurance, whether for individuals or businesses, essentially covers losses resulting from any data breach,” says Evaa Saiwal, practice manager, liability and financial risk, Policybazaar.com. For individuals, it may be phishing, identity theft, stalking, hacking into social networks, among others listed by Irdai (see Covered losses…).
“While large companies usually have firewalls in place to control cyberattacks, this is not always possible in the case of individuals,” says TA Ramalingam, CTO, Bajaj Allianz General Insurance. Also, many people are negligent in their online transactions, leading to breaches and losses. All costs incurred to combat the situation due to these cybercrimes are covered, including first party losses, costs of regulatory measures, crisis management and liability claims.
The individual plans currently available insure all or some of the 11 cybercrimes listed by Irdai, and covers start from Rs 10,000, going up to Rs 5 crore. Most insurers also offer customizable plans, depending on the risk exposure and budget of the insured, and one can choose the specific crimes one wants to cover. For an additional fee, you can also include IT consultation and psychiatric counseling.
Losses covered by personal plans
Irdai described the losses resulting from these crimes that must be covered.
- Theft of funds: Covers losses due to a cyber incident or the hacking of a bank account, credit/debit card and/or mobile wallet by a third party.
- Cyberbullying/Bullying: Covers expenses to prosecute the harasser.
- Malware/data restoration cost: Includes the cost of restoring data due to malware.
- Phishing: Covers financial losses due to a phishing attack, including expenses incurred in prosecuting perpetrators.
- Cyber extortion: Provides protection against extortion losses due to cyber extortion threat; includes expenses incurred to prosecute perpetrators.
- Identity theft: Covers defense costs for claims against the insured by a third party or affected party due to identity theft fraud. Includes expenses to prosecute perpetrators and transportation costs.
- Media Liability Claims: Covers defense costs in third party claims of defamation or invasion of privacy due to the publication or broadcast by the insured of any digital media content.
- Social media: Defense costs for claims against the Insured by a third party/affected party due to a hacked social media account, including perpetrators’ lawsuit costs and transportation costs.
- Unauthorized online transaction: Covers the fraudulent use of a bank account, credit/debit card or e-wallet by a third party to make online purchases over the Internet.
- Email spoofing: Covers financial losses due to a spoofed email attack; includes expenses incurred to prosecute perpetrators.
- Data Breach and Privacy Breach: Covers defense costs and damages due to third-party data breach and/or privacy breach claims.
Plans are renewed annually, cover multiple devices, and offer the option to include the family, usually consisting of parents and two children. HDFC Ergo’s Cyber Sachet Insurance also covers students, entrepreneurs, working professionals and shopaholics.
While some plans have sub-limits for specific cybercrimes within the plan, as well as franchises, the new plans remove those limits. The policies also have no waiting periods and anyone over the age of 18 can purchase them, although some have an age limit of 21.
How much do you need?
“The size of coverage you need will depend on how much you have to lose, whether it’s money, data or bank account details. Combine all of that and then come up with a number,” says Saiwal. “If you are at high risk because you are actively engaged in online monetary transactions, you will need higher coverage,” says Ramalingam.
What is the cost?
The premium for `1 lakh cover for an individual can range from Rs 700 to Rs 3,000 per annum. While the annual premium for a Rs 1 lakh plan for the Cyber Safe Bajaj Allianz Individual Insurance Policy is Rs 781; for ICICI Lombard Retail Cyber policy, it is Rs 2,708; and for the HDFC Ergo Cyber Sachet plan for a working professional, it is Rs 984. It is important to not only consider the premium but also the sub-limits and cyber crimes covered before choosing a plan .
Cost of cyber insurance
Here is the premium that a 30-year-old man and an IT company in Delhi (under Indian jurisdiction) are likely to pay.
What is not covered?
Exclusions are the same for all plans and include losses incurred through cryptocurrency, gambling, fraudulent conduct or unauthorized data collection, access to restricted sites, cost of upgrading devices, among others.
Make a claim
The plan comes into effect from the moment the fraud is discovered and you will need to inform the insurer as soon as possible, although there is no specific time limit for doing so. “You will also need to file an FIR and register it with the police cyber cell,” says Ramalingam. You will have to provide a large number of documents, ranging from the complaint to the police, proof of reporting the crime to the bank or the competent body, invoices for the costs and fees incurred for the backup of the devices, the prevention of the crime and crisis management, etc. The claims settlement process can take anywhere from 20 days to a few months. So, if you are actively engaged in online financial transactions or have a large social media presence, it may be a good idea to choose a plan.