- What is Cyber Insurance?
- Why is Cyber Insurance Policy important?
- Who Needs Cyber Insurance?
- What is Covered in a Cyber Insurance Policy?
- What is Not Covered in a Cyber Insurance Policy?
- Cyber Insurance Claims Process
- Documents Required for Cyber Insurance Claims
- How Much Does Cyber Insurance Cost?
- How to Renew Cyber Insurance?
- Why Plum?
What is Cyber Insurance?
Cyber insurance is a type of insurance coverage designed to protect organizations from financial losses and liabilities arising from cyber incidents, including hacking, malware, ransomware etc. It provides financial protection against losses resulting from such data breaches, cyber-attacks, network damage, and business interruptions.
Why is Cyber Insurance Policy important?
Organizations possessing private and sensitive data bear the obligation of safeguarding it diligently. Similarly, businesses that maintain an online presence or rely on technology face rapidly evolving threats.
The prevalence of cyber risk is on a consistent rise globally and particularly in India. India reported 1,700 cyber incidents a week in just the first 6 months of 2023, almost double the global average.
Amongst the 829 million cyber-attacks detected and blocked globally in 2022 [Q4], almost 60 per cent were directed towards India.
Incidents of security breaches and data compromises impact millions of records annually, with reports of such breaches escalating at a rapid pace. Around 236.1 million ransomware attacks were reported worldwide just in the first half of 2022.
A famous cyber break incident is one that occurred with a global software conglomerate. In October 2013, hackers acquired login credentials and 3 million credit card numbers. of approximately 38 million customers.
The incident cost the company $1.1 million in legal fees due to their data security protocols.Cyber insurance provides financial protection and support for businesses in the event of such cyber-related incidents and data breaches.
It helps mitigate the financial, legal, and reputational consequences of these events.
Who Needs Cyber Insurance?
Cyber insurance is essential for companies of all sizes to consider as an effective risk management strategy.
It becomes especially important for businesses that handle, store or deal with data primarily, to be protected with cyber insurance.
Countries around the world are drafting their own data protection laws and guidelines, that corporates conducting operations in the country must abide by.
The GDPR (General Data Protection Regulation) is one such data protection measure for EU countries. India will soon be proposing a national guideline on data security and privacy, which will ensure data security and mitigate cyber breaches and other related cyber incidents.
Cyber insurance provides comprehensive coverage against financial and consequences to your reputation due to cyberattacks. This insurance safeguards businesses from both first-party and third-party liabilities, encompassing various scenarios such as cyber extortion, unauthorised data access, and data breaches.
Its primary aim is to protect sensitive customer and employee information, ensuring the security of personal data.
What is Covered in a Cyber Insurance Policy?
Data Breach Costs
These include expenses related to notifying affected parties, offering credit monitoring services, legal fees, public relations efforts, and regulatory fines
Business Interruption Losses
Coverage for income lost due to a cyber incident that disrupts normal business operations
Protection against threats of cyber extortion, where malicious actors demand payment to prevent or cease a cyberattack
Costs associated with restoring or recovering lost or compromised data
Legal expenses and settlements if the insured party is held responsible for damages caused to third parties due to a cyber incident
Regulatory Fines and Penalties
Fines and penalties decided by a regulatory body for breach of any data protection & privacy law
What is Not Covered in a Cyber Insurance Policy?
Cyber Insurance typically does not cover claims relating to the following categories;
Bodily Injury/ Property Damage
Criminal, Dishonest and Fraudulent Acts
Contractual Liability - Assumption of liability under a contract or agreement
Any actual or alleged unfair competition, antitrust violations, deceptive trade practices
Cyber Insurance Claims Process
Following are the steps to file a Cyber insurance claim;
Initiate contact on priority with the Plum team to report the cyber incident.
Plum works promptly with the insurer partner and subsequent course of action is determined.
In collaboration with Plum and the insurers, an investigator is designated to assess the severity and analyse the details of the cyber incident.
Expert guidance on containment measures to prevent the situation from worsening further is provided.
The Plum team aids you in comprehending the necessary documentation, which includes records on the extent of the impact, the actions taken for remediation, and any direct expenses incurred during the claims procedure.
Following an in-depth analysis of the documentation, the survey report is created.
Plum maintains a strong liaison with the insurer and policyholder throughout the claim approval process.
Documents Required for Cyber Insurance Claims
Each claim situation is unique to the business and the incident. Following are the typically required documents when it comes to filing a cyber insurance claim:
Copy of the FIR from the police reports
Forensic reports (if any)
Copy of invoices for expenses against IT Consultant Services cover and against restoration costs
Proof of personal data belonging to you
Proof of loss incurred - details regarding people involved, mitigating practices, dates, circumstance and any screenshots of findings
Copy of legal notice and summonses from a court (if any)
How Much Does Cyber Insurance Cost?
The pricing of Cyber Insurance is tailored to each company's unique characteristics or business and the specific risks it encounters. Nonetheless, certain elements impact the cost of cyber insurance, including the company's size, industry, volume and sensitivity of data, annual income, and the effectiveness of its current data security protocols, as well as the chosen sum insured.
Plum understands the intricacies of Cyber Insurance costs and business vulnerabilities. In order to simplify and make the process transparent, we have developed the Plum Business Policy Engine.
Our engine offers you valuable insights into policies suitable for businesses similar to yours, along with estimated expenses.
How to Renew Cyber Insurance?
To renew your Cyber Insurance policy, contact the Plum team, who will initiate the renewal procedure. Armed with your policy documentation and pertinent details, Plum will offer comprehensive guidance throughout the renewal process.
Typically, a renewal with Plum entails the following steps:
Plum conducts a thorough evaluation of your policy parameters, including coverage, costs, and exclusions. This evaluation is benchmarked against market standards and industry peers.
Based on these evaluations/ alterations in your data or business operations, Plum provides tailored recommendations for shaping your Cyber Insurance policy.Copy of the FIR from the police reports
Once these policy recommendations are established, we collaborate with top-tier insurance partners in the market to craft the most exhaustive and competitively priced policies for your company.
The Plum team makes the process of renewing and booking a Cyber Insurance policy smooth and hassle free. Copy of invoices for expenses against IT Consultant Services cover and against restoration costs
The Plum team is adept with experts in the field of insurance. Having deep dived in the insurance industry for years now across various industries, helping SMEs and large enterprises alike, we have the right expertise to consult for your business . This experience helps us build expertise. The team will be by your side right from curating plans for your business to policy purchase and claims settlement
We leverage our strong insurer relationship and bring evolving knowledge of claims trends, reinsurer market and price fluctuations to the table. This allows us to present competitive and comprehensive plans in the market, tailored to your business.
Smooth claims settlement
Claims are complex in nature and the repercussions of these claims may sometimes take days/months to recover from, if not years. Plum helps you navigate such long-drawn claims processes with ease by liaising our deep partnership with insurers, legal counsel, and our team of experts.
What does Cyber Insurance typically cover?
Cyber Insurance coverage can include expenses related to data breaches, network security failures, cyber extortion, business interruption, legal liabilities, and customer notification and credit monitoring services.
What types of cyber incidents are covered by Cyber Insurance?
Cyber Insurance covers various cyber incidents such as data breaches, ransomware attacks, hacking, social engineering attacks, malware infections, denial-of-service (DoS) attacks, and theft or loss of sensitive data etc.
Does Cyber Insurance cover both first-party and third-party losses?
Yes, Cyber Insurance typically covers both first-party losses (direct expenses incurred by the insured business) and third-party losses (liabilities and legal expenses arising from claims made by affected third parties).
How does Cyber Insurance help in managing a data breach?
Cyber Insurance assists in managing a data breach by covering expenses like forensic investigations, notifying affected individuals,, public relations efforts, and legal defence costs in case of lawsuits.
Can small businesses benefit from Cyber Insurance?
Absolutely. Small businesses are highly vulnerable to cyber threats too. A 2022 SwissRe report on Cyber Insurance stated that SME are preferred targets for cyber criminals, with their average claim being three times larger than bigger firms.
Cyber Insurance helps small businesses protect their finances and reputation by covering the massive costs arising from cyber incidents.
How is the coverage limit determined for Cyber Insurance?
The coverage limit for Cyber Insurance is determined based on factors such as the business size, industry, level of cyber risk exposure, and the potential financial impact of a cyber incident.
Check out the Plum Business policy engine to tailor your business's ideal Cyber Insurance policy.
Are there any exclusions in Cyber Insurance policies?
Yes, Cyber Insurance policies may have exclusions such as prior known breaches, deliberate acts, and failure to maintain proper security measures. Ultimately, the specific cyber insurance policy determines the exclusions. There are no blanket exclusions for a cyber insurance policies.