The notion that cyber-crime is restricted to lone hackers working from a PC in their bedroom is long outdated. Sophisticated and interconnected groups now target companies and individuals in increasingly audacious attacks: Payment gateway company Razorpay recently got robbed of Rs. 7.3 crores by hackers using ‘failed transactions’.
Recent high-profile cyber-attacks demonstrate that the extent of associated possible losses is also broadening, increasingly comprising both physical and financial damage relating to data privacy breaches and to companies’ tangible and intangible assets, and also business interruption costs. As a result, the issue of cyber protection is rising up the corporate agenda, at both large and small companies.
Between 2018 and 2021, there was an over five-fold jump in the number of cybercrime and fraud incidents recorded by the government, as informed by the ministry of electronics and information technology (Meity) to a parliamentary panel.
Corporate Cyber Insurance, also known as cyber liability insurance, is essentially purchased to reduce the financial risks associated with doing business online. It covers losses and business liability arising out of a cyber security breach. The policy offers complete insurance protection to your business against cyber or digital risks that can result in a financial loss to the insured and reputational loss to a third party because of a breach in the insured’s systems.
This insurance is very crucial and useful in today’s world which incorporates online functions in daily activities. Cyber security policies can change from one month to another, given the dynamic and fluctuating nature of the associated cyber risks, keeping up with newer possible cyber threats against businesses.
It is extremely necessary that the corporates should adopt this policy in order to secure all their financial data, employees & customers’ data, programs, computer and network of an organization from the unauthorized access and exploitation. Also, in case of a cyber-attack there are high costs required to be incurred for forensics, investigation, ransom-ware, and losses related to business interruption of the insured post an attack. Implementation of corporate cyber security will not only minimize the risks of data breach but will also improve a firm’s mean-time to respond to an attack.
Cyberattacks and data breaches are expensive and increasingly common. While an increasing number of companies are buying cyber insurance to manage their risk, these are generally large corporates.
The cost of cyber liability insurance depends on your cyber risks. Network security companies, IT consultants, and other companies that are responsible for their clients' cybersecurity may pay more for cyber liability coverage. They need third-party cyber liability insurance, which provides protection if a client blames their business for failing to prevent a cyber incident.
Like most organizations, crime also went digital during the pandemic. As per the National Crime Records Bureau (NCRB) report for the year 2020, cybercrime surged 12% across the country, even as other crimes such as murder, theft and cheating witnessed a drop due to the national and regional lockdowns.
|Type of Cyberattack||2019||2020||% Increase/Decrease|
|Social attacks (phishing, vishing, pharming, etc.)||114,702||341,342||197.60%|
|Credit card fraud||14,378||17,614||22.50%|
|Denial of service (including DoS)||1,353||2,018||49.20%|
It's clear that there is great potential in the cyber risk insurance market and we want to support our clients in building a sustainable and profitable book of business.
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