Cyber insurance A proactive measure for enterprises

 Over the previous couple of months, the pandemic has significantly changed the cyber security threat landscape. This has resulted in technology playing a serious role in re-defining the ‘new normal’ as businesses across the world became hooked in to technology for running their day-to-day operations through a foreign working model. With more employees working remotely businesses and organisations struggling to enforce practices like endpoint encryption, disabling removable media, identifying unauthorised software, secure connectivity to office network etc.


Cyber criminals are exploiting this chance to hack into organisations, exfiltrate data, cause network disruption etc. Over 8 billion data records were compromised in Q1 of 2020[1] and such incidents have only paved way for cyber insurance India amongst organisations looking to minimise the loss thanks to cyber incidents and data breaches.


Cyber policy may be a risk transfer mechanism employed by organisations to guard themselves from losses and expenses arising thanks to cyber-attacks. The cyber insurance market globally is estimated to exceed USD20 Billion by 2025[2]. In India, on the brink of 350 cyber insurance policies were issued in 2018[3]. this is often expected to extend as cyber security is becoming a board room agenda across businesses.


Some of the standard inclusions of a cyber policy are:


Business interruption costs

Forensic investigation costs

Administrative fines

Cyber extortion expenses

Breach notification costs

Legal expenses.

Some of the standard exclusions of a cyber policy are:


Fraudulent act or willful violation

Mechanical or electrical failures

Bodily injury

Property damage

Loss of property (IP)

Loss thanks to cyber terrorism/war.

While most insurance products are supported decades of aggregated and actuarial data, assessing cyber risks and pricing cyber insurance products has been a touch challenging due to the evolving cyber landscape and lack of historical data for actuaries to figure with. Organisations also are facing challenges to quantify the cyber risks and choose on an appropriate cyber insurance cover.


Industry leaders are now trying to find a quantitative approach to assess their cyber risks along side adequate provisioning and shut monitoring of key changes in their risk environment. they're looking to realize objective insights into the cyber risk profile posed within the near future, envisaging cost-effective mitigation strategies, procuring tailor-made insurance structures, to best protect against likely attacks and analysing the impact on risk tolerance, accepted risks and retained losses.


Some of the key areas organisations should confine mind while they operate during this crisis are as follows:


Does your cyber policy cover the kinds of attacks that are most prevalent in recent times?

Are there any conditions as per your cyber policy that you simply are required to suits to make sure that the policy coverage applies?

Organisations should anticipate discussions with underwriters on issues like -


How the business will cope when a cyber-attack has taken place and the way far does it impact them?

If there any financial troubles which will hinder the specified investment in cyber security ?

Cyber security privacy policies and procedures

Work from home deployment models

Virtual private networks and other secure remote access.

All organisations got to understand the threat levels during this current environment and therefore the risk that they're going to face with regards to the ever-evolving cyber setting, address key cyber security issues also and find appropriate approaches towards covering these cyber risks.


Have future predictive attacks and defenses ready in order that going forward within the post COVID-19 era, your organisation is cyber protected and cyber insured.


[1] Q1 Data Breach QuickView Report, Risk Based Security, 2020


[2] Cyber Insurance: Risks and trends 2020, MunichRE, 14 April 2020


[3] Cyber Insurance in India, Data Security Council of India, April 2019

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