What is personal cyber insurance? All you need to know

Online fraud through malware, phishing, identity theft and other online threats such as cyber bullying is increasing year on year in various countries including India. Since the digital revolution, cases of cyber fraud have been on the rise and a quantum leap in such incidents was seen during the Covid-19 pandemic as the need for digital payments increased.

To ensure monetary safety against any kind of cyber fraud, the Insurance Regulation and Development Authority (IRDAI), the country’s main insurance regulator, and insurance companies have introduced cyber insurance policies that offer coverage against monetary loss. for cyber fraud. Both companies and individuals can take out a cyber insurance policy.

What is Cyber ​​Insurance?

Cyber ​​insurance policies offer protection against loss due to a network-based event for a business or individual policyholders. It is designed to protect policyholders from the effects of cyber attacks and risk exposure by covering costs after a cyber attack or security breach occurs. Cyber ​​insurance covers legal expenses and costs associated with cyber fraud, which can involve hacking into systems, data theft and loss of important information, cyber bullying, etc.

What are covered by personal cyber insurance plans?

The IRDAI has outlined the following losses that must be covered by personal cyber insurance.

theft of funds: Losses due to cyber incidents or hacking of bank accounts, credit/debit cards and/or mobile wallets by a third party are covered by personal cyber insurance policies

Bullying/cyber bullying: Expenses to investigate and prosecute the online harasser are covered.

Malware/data recovery cost: Data restoration costs for loss through malware are covered.

Identity fraud: Financial losses due to phishing attacks are covered, including expenses to prosecute the perpetrators.

cyber extortion: Protection against extortion of money by cyber criminals is provided. Expenses to prosecute perpetrators are also covered.

identity theft: Legal defense expenses are covered for claims against third-party policyholders or those affected by identity theft or fraud, including the costs of persecuting the perpetrators and transport costs.

Media Liability Claims: Defense expenses are covered in third party claims for defamation or invasion of privacy after the publication or dissemination of any digital media content.

social media: Defense expenses for claims against insureds by third parties/affected due to hacked social media accounts are covered, including expenses to prosecute offenders.

Unauthorized online transaction: Fraudulent use of a bank account, credit/debit card and electronic wallet by third parties to make purchases online is covered.

Email phishing: Financial losses due to a spoofed email attack are covered, including expenses to prosecute the perpetrators.

Data breach and privacy breach: Defense costs and damages for third-party claims for data violation and/or privacy violation are covered.

Different policies may contain additional coverage for additional benefits, such as counseling after a crime, etc. Some plans may have cyber crime sub-limits and specific deductibles. However, newer plans are removing these limits.

How to obtain a Personal Cyber ​​Insurance policy?

People over the age of 18 are eligible to purchase a cyber insurance policy. Major private insurance companies like HDFC, Bajaj Allianz, ICICI Lombard, etc. They offer this type of insurance policy. However, the minimum age to purchase certain policies is 21 years.

What is the cost of personal cyber insurance?

The premium for a policy with coverage of Rs 1 lakh for an individual can range from Rs 700 to Rs 3,000. The amount of the premium depends on the type of cyber crimes covered by the policy and the services offered.

The annual premium for Rs 1 lakh Bajaj Allianz Individual Cyber ​​Safe Insurance plan is Rs 781. ICICI Lombard Retail Cyber ​​policy costs Rs 2,708 annually. The HDFC Ergo Cyber ​​Sachet plan for a working professional costs around Rs 984 per year.

All plans renew annually and cover multiple devices. Some provide the option to include the family, usually consisting of parents and two children.

What are not covered?

Policies do not cover losses incurred through cryptocurrency, gambling, fraudulent conduct or unauthorized data collection, access to restricted sites, device upgrade costs. Physical injuries resulting from cyberattacks or fraud are also not covered.

How to file a claim?

To file a claim, the policyholder must notify the insurer immediately. An FIR must be filed with the police and cyber cell and a copy of the FIR must be submitted with other relevant documents, such as proof of reporting the crime to the bank or relevant body, invoices for costs and fees incurred in protection devices, etc. . to the insurer. Settlement may take 20 days or a month depending on individual cases.

(Edited by : sudarsanan mani)

First published: IST

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