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As an insurtech startup that understands the importance of protecting businesses against cyber threats, Plum is here to help you understand the basics of cyber insurance in India.

Cybersecurity has become a pressing issue for businesses of all sizes in India. With rapid digitalization and the increasing number of cyber attacks, it has become crucial for businesses to protect themselves against potential losses.

This is where cyber insurance comes in.

Introduction to Cyber Insurance in India

Cyber insurance is a policy that provides coverage against losses caused by cyber attacks. It covers a range of risks, including data breaches, cyber extortion, and business interruption due to a cyber attack. In a cyber attack, cyber insurance can help mitigate the financial impact on the business.

In India, the demand for cyber insurance is on the rise. As per a report by PwC, cyber insurance premiums in India are expected to grow to INR 7.5 billion by 2022.

With the increasing cyber threats and the growing awareness of cyber insurance, it has become imperative for businesses to understand how cyber insurance works and how it can benefit them.

Benefits of Cyber Insurance

  1. Protection against financial losses: Cyber insurance can cover the financial losses arising from cyber-attacks. This can include costs associated with data recovery, legal fees, and business interruption.
  2. Protection against reputational damage: A cyber attack can damage a business's reputation. Cyber insurance can help cover the costs associated with PR and communication efforts to restore the business's reputation.
  3. Risk assessment: Insurance providers can help assess a business's cybersecurity risks and provide mitigation recommendations.
  4. Legal support: Cyber insurance policies can provide legal support in a cyber attack. This includes legal representation, fines and penalties coverage, and regulatory compliance support.

Cyber Insurance Coverage in India:

Cyber insurance policies in India can vary depending on the provider and the level of coverage required. Some common types of coverage include:

  1. Network Security Liability: Coverage for claims made by third parties due to a security breach in the business's network.
  2. Privacy Liability: Coverage for claims made by individuals whose personal information has been compromised due to a security breach.
  3. Cyber Extortion: Coverage for costs associated with cyber extortion threats.
  4. Business Interruption: Coverage for losses due to the interruption of business operations due to a cyber attack.
  5. Data Recovery: Coverage for data recovery and restoration costs after a cyber attack.


  1. Lack of awareness: Many businesses in India are unaware of the importance of cyber insurance and the risks associated with cyber-attacks.
  2. Limited coverage: Some cyber insurance policies may not cover all cyber attacks, leaving businesses vulnerable to losses.
  3. Difficulty in assessing cyber risks: Cyber risks can be complex, and it can be challenging for businesses to assess their level of risk accurately.
  4. High premiums: Cyber insurance premiums can be expensive, making it challenging for small and medium-sized businesses to afford.

Despite the challenges, cyber insurance can provide significant benefits for businesses in India. As cyber attack threats grow, businesses must take proactive steps to protect themselves. By investing in cyber insurance, businesses can minimize the financial impact of a cyber-attack and protect themselves against reputational damage.


In conclusion, cyber insurance is essential in protecting businesses against cyber attacks in India.

With the growing demand for cyber insurance and the increasing cyber threats, businesses must consider cyber insurance as part of their risk management strategy.


Q. How does the claims process work for cyber insurance policies in India?
A. In India, the cyber insurance claim process starts with immediate notification to the insurer after a cyber incident. Documentation is crucial, hence, businesses must collect evidence of the breach and its impacts. The insurer then assesses the claim, considering the policy terms. Assistance in crisis management and legal support follows. This streamlined process aims to mitigate losses quickly.

Q. What specific criteria do insurance companies use to assess a business's cybersecurity risks and determine premiums?
A. Insurers evaluate several factors to assess risk. These include the company's industry, size, and data sensitivity. Cybersecurity practices, like firewalls and anti-virus software, play a role. Past cyber incidents are also considered. This comprehensive assessment helps in setting premiums that reflect the actual risk. Therefore, stronger cybersecurity measures can lead to lower premiums.

Q. Are there any government regulations in India that affect cyber insurance policies, either in terms of requirements for businesses or the coverage insurance companies must provide?
A. Yes, Indian regulations are evolving to address cyber risks. The IT Act and guidelines from the IRDAI influence cyber insurance. These regulations mandate certain cybersecurity practices and insurance coverage standards. Compliance with these guidelines is crucial for businesses. It ensures their policies provide adequate protection against cyber threats. As regulations evolve, staying updated is key for businesses.