India has moved phenomenally over the last decade both on internet usage and mobile phone usage. It is now the world’s second in terms of ____ usage. Trade transactions have been now shifting from physical mode to digital mode thus exposing to the various frauds, cyber attacks, scams and malicious intent prevailing in the cyber world.
These cyber attacks can cause loss of data, fraudulent transfer of funds, networks to interrupt, non-functioning of the websites, diversion of traffic to competition, loss of image, invitation to legal hassles, serious damage to reputation and financial losses to the company or individual. The person or group of persons seeking compensation can be from anywhere in the world. A company can incur huge expenses to fight a legal battle. As per the IT Act 2000 (as amended in 2008), Government of India holds a corporate responsible for breach of data. This makes it necessary for a corporate to protect itself from potential financial loss and legal expenses in case of loss due to breach of data.
Cyber Liability Insurance includes all coverages to protect an organization suffering data breach. It also protects the organization from losses suffered due to unauthorized network access, denial of access, privacy invasion, extortion threats, data restoration, losses due to leakage of confidential information and business interruption expenses. Infact along with Cyber Liability Insurances comes hosts of services like risk mitigation measures, risk assessment by forensic experts, devices to block unwanted internet protocolsmaking the products more comprehensive.
While it would be very common to believe that the cyber insurance product would be a need for mostly IT and IT enabled services companies, E-Commerce companies but cyber insurance would also be of utmost importance to Banks, Financial Institutions, NBFCs, Pharma companies, research organizations, hotels, hospitals, all those that deal with transactions through internet and store or own customer data over computers.