Cyber Insurance: The Sheild Against Cyber Scams & Threat In India

In the 21st century, the world is divided into two parts. i.e. the real and physical world and the cyber or digital world. And just like the two worlds, we all have two not-so-distinct but still different identities. The cyber-world makes us feel safe and lets us act on our impulses as the harm or danger doesn’t seem to be direct and maybe this is one of the reasons behind the increasing rate of cybercrimes.

As the number of cybercrimes is increasing day-by-day, it has now become crucial for one to set some preventive measures against it and one of those preventive and protective measures is cyber insurance. This insurance scheme was introduced to protect people from crimes happening in the cyber world such as identity theft, hacking one’s private accounts, leaking one’s sensitive information without consent, etc.

Type of Insurance	Cyber Insurance
Meaning	An insurance policy that provides financial coverage in case someone becomes a victim of cybercrime
Purpose	To protect people from crimes in the cyber world
Coverage	Covers a wide variety of cybercrimes like breach of data, online fraud, etc.
Who can get it?	Individuals and business entities

Read More: Cyber Fraud Mitigation Centre (CFMC)

What Is A Cyber Attack?

A cyber-attack is a criminal activity wherein individuals attempt to use someone’s personal information or system for some personal gain. Anyone can fall prey to cyber-attacks including people and business entities. Attackers can use several ways to plan a cyber-attack such as phishing, identity theft, malware, etc.

Condition Of Cyber Threat In India

The seriousness of the situation is best delivered by presenting accurate numbers. In the year 2023, a report recorded that there were around 11 million cyber-attacks across the country wherein people lost approximately 1750 crore to the attackers. Some of the most common types of cybercrime are malware attacks, phishing, social engineering, ransomware, breaches of data, and one of the latest techniques is digital arrest.

When one falls prey to any type of criminal activity, they don’t only lose personal information or money but it greatly harms their psychological health too. From a cycle of disturbing questions like ‘why was it me’ to the feelings of weakness and inferiority deteriorates one’s psyche greatly. Hence, all of us must be aware of every aspect of cybercrimes and how one can stay safe from them.

Read More: How To Report Cybercrime And Online Fraud In India?

Common Types Of Cyber Security Attack

There are some prevalent cyber security attacks that one should be aware of. All of them are mentioned below.

Sr. No.	Type of Attack	Meaning
1	Phishing	Tricking people into sharing their information
2	Malware	Attacking using software like viruses, worms, spyware, etc.
3	Ransomware	Stealing data to ask for monetary gain
4	Denial-of-Service (DoS)	Overloading a network so that people can’t use it
5	Social engineering	Manipulating people into sharing personal information
6	Man-in-the-Middle (MitM)	Intercepts a conversation between 2 parties for personal motive
7	SQL Injection	Sending malicious SQL code to gain unauthorised access
8	Digital arrest	Falsely pretending to be an authority to place an arrest through digital measures

What Is Cyber Insurance?

Cyber Insurance is an insurance policy that serves as a protective and preventive measure against cybercrimes. It helps both, individuals and business entities to protect themselves from the vulnerabilities of the cyber world. Cyber insurance covers various costs and services like compensation fees and restoration of reputation, in case one may fall prey to cybercrimes.

Who Needs Cyber Insurance?

As the rates of cybercrimes are rising, it is crucial for some people and businesses to have cyber insurance such as:

• Financial institutions such as Banks and other financial institutions are very vulnerable to cyber security attacks hence they should have cyber insurance.

• Government organisations, as they have data of the citizens, they need to have cyber insurance as well.

• Healthcare providers as they have sensitive data and resources that the attackers can exploit, they should have cyber insurance.

• Educational institutions, as they deal with the personal information of innumerable families of their students and staff members.

• Along with these big sectors, individuals and businesses in the small sector should also have cyber insurance as a protective layer against cyber security attacks.

Read More: Chakshu Portal To Report Fraudulent Calls And SMS

Why Is It Important To Have Cyber Insurance?

Everyone must have cyber insurance for a variety of reasons. Some of the major reasons are:

• Protection: Cyber insurance serves as a protective shield that would help them even if they fall prey to cybercrimes.

• Recovery: Cyber insurance would help individuals to recover whatever resources they might lose to the attackers.

• Legal aid: Cyber insurance also covers legal costs and penalties and makes this frustrating incident as easy for people as it can.

Cyber Insurance Coverage For Individuals

Cyber insurance for individuals covers a wide variety of cybercrimes. The list of those cybercrimes are listed below:

• Identity theft

• Cyber fraud

• Ransomware

• Data breach, and others.

Cyber Insurance Coverage For Business Entities

Cyber insurance for business entities covers a wide variety of cybercrimes. The list of those cybercrimes are listed below:

• Data breach

• Ransomware

• Legal fines, and others.

Risks Covered Under Cyber Insurance

Cyber insurance policies cover a wide range of risks to protect people against cybercrimes. Some of the risks covered under cyber insurance policies are:

• Identity theft: Covers in recovering and restoring one’s identity.

• Data breach: Helps in recovering stolen data.

• Damage to the system: Covers repair costs in case there is any significant damage to the system.

• Ransomware: Covers any financial losses due to ransomware demands.

• Legal fees: Covers legal fees associated with any investigation done by people or organisations to find the attackers.

Risks Not Covered Under Cyber Insurance

Cyber insurance policies do not cover certain things or events. Some of the risks not covered under cyber insurance policies are:

• Fault: If a cyber-security attack happens due to an individual’s or organisation’s member mistake.

• Weak security: If a cyber-security attack happens due to poor security of systems.

• Prior attacks: If the individual or business entity has faced a cyber-security attack before purchasing the cyber insurance policy.

• Insider attack: If an employee of a business commits a cyber-security attack.

Read More: New APK Scam

How To Raise A Claim For Cyber Insurance?

One can file a claim for their cyber insurance by following the steps mentioned below in detail for one’s better understanding:

Step 1: After the event, please contact your insurance agency.

Step 2: File an official complaint with all the necessary details like the description of the incident, date, type, etc.

Step 3: Attach any supporting documents as evidence like phone call records, any mail or SMS, etc.

Consequences On Businesses For Not Having A Cyber Insurance

There can be severe vulnerabilities that businesses might be get in to without cyber insurance policies. Some of the issues associated with not having a cyber insurance are:

• No compensation: Without any coverage of cyber insurance policies, businesses will not be able to receive any form of compensation for the losses they might suffer.

• Disruption in regular work: Business entities won’t be able to work like usual after falling prey to a cyber-security attack.

• Psychological damage: After experiencing such losses due to cybercrimes, the psychological health of the employees and the employer deteriorates to a greater extent.

• Legal repercussions: There might be legal consequences for businesses that lose their clients due to cybercrimes.

How To Protect Businesses From Cyber Security Attacks?

A business entity can take several measures to protect their organisations against cybercrimes. These measures are very important to incorporate and they are:

• Cyber Insurance Policy: Firstly, invest in a good cyber insurance policy so that it can cover and protect your business in case an online attackers attack the business.

• Enhances security: Employ sturdy security measures like firewalls to protect the business against cyber attackers.

• Awareness: Organise workshops or make circulars for spreading awareness about cybercrimes and their forms among the employees.

• Role-defining and monitoring: Define every employee’s role in the organisation and keep a note of whatever they can access. Also, regularly monitor employees’ work to avoid any insider attacks.

Read More: Fake Vahan Parivahan Ticket Scam

Difference Between Cyber Insurance & Cyber Defence

There is a clear difference between cyber insurance and cyber defence. We are breaking both of them point by point. Let's learn about both aspects carefully.

Aspect	Cyber Insurance	Cyber Defence
Meaning	An insurance policy that provides financial coverage in case someone becomes a victim of cybercrime	Ways to protect systems from cyber attacks
Purpose	Aims to protect people from cyber attacks	To prevent the occurrence of cyber attacks
Coverage	Covers against cybercrimes like phishing, identity theft, malware, etc.	Includes firewalls, antivirus, encryption, etc.
Type of response approach	Strategies after the cybercrime happens	Prevents cybercrimes from happening
Managed by	Insurance providers	IT and cyber security teams
Overall Impact	Helps in providing compensation	Focuses on strengthening the security system

Conclusion

Cases of cybercrimes have been increasing by the minute hence individuals and business entities must invest in cyber insurance policies before it’s too late.

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