What is Cyber Insurance?
Cyber Insurance is a specific insurance policy meant to protect you from all sorts of cyber incidents, security breaches, network downtime, damage to your cyber assets and other such interruptions to your business.
When do you need Cyber Insurance?
Your company may be insured against fire, theft, earthquakes and even other Acts of God. If, however, the first virus attack or DoS (that's Denial of Service) attack is going to irreversibly affect your bottom line, then you need Cyber Insurance.
Another aspect of Cyber Insurance is Cyber Liability Insurance. This protects you from liability when you publish matter on the Internet. With even small businesses making their e-commerce presence felt on the Internet, businesses are exposed to several new kinds of legal liabilities. Cyber Insurance would also protect you from such liability claims.
Why do you need Cyber Insurance?
Your traditional insurance policy may protect your physical assets. So, if lightning strikes your office building and destroys some computers, you will probably be reimbursed for the computers. But that does nothing to mitigate your data loss. That is why you may need Cyber Insurance.
What do you need to consider while buying Cyber Insurance?
First, learn to treat cyber insurance like your traditional insurance. Understand your cyber assets and then look carefully at what your policy would cover. Do a self-check. Cyber Insurance policies will be given only if your current security measures meet certain criteria. So that should basically cover anti-virus, regular updates, firewalls, taking frequent and regular backups, no illegal downloads or pirated software etc. As you can see, these are things that you should be taking care of as it is.
What is the Indian Cyber Insurance scene like?
A recent report by Marsh India has found that 55% risk managers believed a cyber attack to be their largest concern. When they were asked what consequence of a cyber attack worried them most, 43% felt it was damage to their reputation, 30 % felt it was financial loss, 16% were worried by the prospect of legal liabilities, and 9% about regulatory action or loss of license.
Despite this, as per the report, only 21% had stand alone cyber insurance.
Moral of the story - take a good, long look at what you stand to lose in the event of a cyber attack. Then, insure to secure.