Hyderabad:
Suggesting a whole range of new Cyber Liability policies, a working group formed by the insurance regulator IRDAI to study `Cyber Liability Insurance' and provide suggestion to develop a `Standard retail cyber liability cover' has said standardisation of cyber insurance policy presents many challenges .
Cyber insurance is a response mechanism to cyber risks which are dynamic and evolving and stndardisation may not be able address all the emerging risks and is likely to limit innovation, said the report prepared by the panel. .
Moreover, cyber insurance, at present, is much dependent upon support of reinsurers who instead of a standardised wording may prefer to use coverage and exclusions as per the latest developments in the market, said the report.
Also cyber insurance, being a relatively new product, calls for flexibility for gaining traction and insurers can build in certain minimum covers as a part of individual cyber insurance to facilitate better understanding in the market.
The IRDAI had formed a panel, under chairmanship of P Umesh Kumar, to suggest new range of cyber products as the existing general liability policies do not cover cyber risks and cyber insurance policies currently available are highly customized for clients in a new and quickly growing market.
Hence, it is felt that a basic standard product structure is required to provide insurance cover for individuals and establishments to manage their cyber risks, said the IRDA.
Cyber risks have accelerated by as much as 500 per cent since the first lockdown was imposed in India in March 2020. There is an increase in coronavirus-themed spam,likely resulting in more infected personal computers and phones.
A model policy wording, conceptualised by the Working Group, can be considered by the insurers as a reference point to provide minimum basic coverage.
It is good to advise customers about Dos and Don’ts with regard with regard to cyber security, said the report..
The report also lists the same for individual cyber insurance policy buyers which help spread awareness on cyber vulnerabilities and risk mitigation.
Global survey conducted by Swiss Re reveals that Individuals are more worried about financial losses resulting from illicit access of financial credentials, identity theft, data loss due to technical issues and breach of privacy.
The salient features of new range of individual cyber insurance policies as suggested by the committee are- .
– Theft of funds – Provides protection in respect of theft of funds due to Cyber Incident or Hacking of insured’s Bank account, Credit/Debit card and/ or Mobile wallets by a Third Party,.
– Identity Theft Cover – Provides protection in terms of Defence cost for claims made against insured by third / affected party due to identity theft fraud,
provides expense to prosecute perpetrators and other transportation cost,.
– Social Media Cover / Personal Social Media- Provides protection in terms of Defence cost for claims made against insured by third / affected party due to
hacked social media account of insured, provides expense to prosecute perpetrators and other transportation cost,.
– Cyber Stalking / Bullying – Provides expenses to prosecute the stalker,
– Malware Cover / Data Restoration Cost – Provides coverage for data restoration cost due to malware,.
-Phishing Cover – Provides protection in respect of financial losses as a result,
of phishing attack and provides expense to prosecute perpetrators,.
– Unauthorised Online Transaction – Provides protection against fraudulent use of bank account, credit / debit card, e-wallet by third party to make online purchasing over internet,.
– Email Spoofing – provides protection in respect of financial losses as a result of spoofed email attack and provides expense to prosecute perpetrators,
– Media Liability Claims Cover – Provides coverage for defence costs in third party claims due to defamation or invasion of privacy due to Insured’s
publication or broadcasting of any digital media content,.
-Cyber Extortion Cover – Provides protection for extortion loss as a result of Cyber extortion threat and provides expense to prosecute perpetrators,.
-Data Breach and Privacy Breach Cover – Provides indemnity for defence costs and damages in respect of claims lodged by a Third party against the
Insured for Data Breach and or Privacy Breach
Cyber insurance policies, currently available, address the requirements of individuals reasonably well. But, there are some areas in the product features and processes which need improvement. Recommendations made to fill in the gaps include need for flexibility in insistence of an FIR at the time of claims, clarity in exclusion language relating to compliance with reasonable practices and precautions, targeted intrusion,unsolicited communication and the need for coverage for bricking costs etc.
Suggestions haven been made to popularise cyber insurance. These suggestions include brining about increased awareness about the policy, making the policy language and claim process easy to follow, give a fillip to group and affinity policies and allow bundling cyber cover with package policies etc.