Cyber Liability Insurance To Become Must For All Tech Heads

Dr. Harold D’Costa, President – Cyber Security Corporation

According to the Internet Crime Report for 2019, released by FBI's Internet Crime Complaint Centre, India ranks third among the top 20 countries that are victims of cybercrimes. With no privacy and data policy in place the cyber space for Indian organizations looks not only scary but also difficult to sustain during these tiring pandemic times.

Data is presumed to be the new gold according to PM Modi and rightly so because without data no organization can sustain. Synchronisation of data into meaningful purpose is done through processed data and that is coined as information, which is used for effective and efficient decision-making process. Alas information security guidelines are in place but are not implemented to derive the maximum benefit. Various information quality practices in India are theoretically in line with the world best practices but rarely used for the betterment of the organization.

With WFH (Work from Home) is the new norm, cyber-crime is on the rise not only in India, but all over the globe. It is therefore not only important but very critical for every organization to safeguard their digital practices. Digitalisation of businesses (via Cloud, BYOD, Mobility, Social Media, and IoT) have increased threat surface and vulnerabilities. At the same time, attacks are becoming more complicated, menacing, and stealthy. To top it, the risk of insider threat makes it extremely difficult for an organisation to ensure a 360° safeguard from attacks.

It is therefore important for every organization from varied verticals to guard against these cyber attacks and therefore “Cyber Insurance” plays a vital role to protect an organization from any eventuality or crimes related to misuse of the cyber space. Apart from the direct monetary loses, the hidden costs of a data breach, which includes lost businesses, partnerships, and reputation could be even more debilitating, necessitating a better risk management and cost-off setting strategy. Cyber Insurance is designed to guard businesses from the potential effects of cyber-attacks. It helps an organisation mitigate risk exposure by offsetting costs, after a cyber-attack/breach has happened. To simplify, Cyber Insurance is designed to cover the fees, expenses and legal costs associated with cyber breaches that occur after an organisation has been hacked or from theft or loss of client/employee information.

Companies in India are now boosting their Cyber Insurance cover at a time when businesses have become increasingly reliant on digital technologies. The critical nature of the data and the complexity of the systems that support its transmission and use, combined with the possibility of remote and anonymous access, have created a gamut of Cyber Risks such as Identity Theft, Malware Attack, IT Theft Loss, Phishing, E-Mail Spoofing, Cyber Extortion, Cyber Stalking, Media Wrongful Act etc. to which Individuals are exposed to due to Cyber Attacks.

Insuring Clauses under “Cyber Insurance” policy are Identity Theft Cover, Social Media Cover, Cyber Stalking Cover, IT Theft Cover, Malware Cover, Phishing Cover, E-mail Spoofing Cover, Media Liability Cover, Cyber Extortion Cover, Data and Privacy Breach by third Party Cover. Many insurance policies provide additional counselling services and IT consultants services.

Even with safeguards in place, cyber-attacks will happen. Cyber Insurance can help mitigate damages and potentially save businesses crores of rupees. While cyber insurance is necessary for everyone, some sectors are most affected by cyber-attacks i.e. businesses taking credit cards or electronic payments (mostly all businesses do take digital payments), medical and healthcare facilities, manufacturing, engineering, telecom, IT, banking and financial institutions as well as business providing professional services.

Any laxity in securing data can result in violation of the laws of the land and attract civil and criminal liability on the organization.