What To Expect In A Cyber Liability Insurance?
Currently, India is witnessing a digital revolution where more than 560 million Indians have access to the internet. It is estimated that by the year 2023, around 650 million Indians would have the power to use the internet and add on to the never-ending digital data. For a business, not only the data collected from their customers, but the data shared internally is prestigious to rise above competitors and achieve organizational goals. And anything prestigious is always worth protecting.
Cyber Liability Insurance is an insurance plan which provides protection against eventualities related to the cyber spectrum, such as data breach and cyber-attacks. A cyber liability policy covers the costs associated with such cybercrimes until the data is recovered or the legal process is over.
What does Cyber Liability Insurance Cover?
Cyber Liability Insurance policies have been around for many years but have gained momentum with the rise of internet users and digital platforms. With the rise of cybercrime, more and more institutions are investing in comprehensive Cyber Liability Insurance programs.
A Cyber Liability Policy provides financial indemnification in the event of any hack or breach:
Expenses incurred by an organisation to investigate how the data breach/cyber-crime occurred and who was ultimately responsible. The expenses pertaining to the professional fees of a forensic agency are covered under the policy.
In case of a data breach, the organisation would need lawyers and analysts to evaluate the scope of the breach in terms of legality. The cost of legal counsel covering the cybercrime is covered under the policy.
In the event of a cybercrime, the organization may be liable to notify the concerned parties (voluntarily or involuntarily) about how the crime can affect them. Such notification costs are covered under the policy.
Loss to electronic media:
If the cybercrime results in damaging the electronic media and the organisation is forced to restore or replace the data and programmes, such costs are also covered under the cyber liability insurance.
Loss of income:
Organisations fear business interruptions due to shut down / system downtime if they mainly rely on a digital platform to offer services. In case of a cybercrime, the loss of income due to these interruptions are covered under the policy.
Security and privacy liabilities:
In case of a third party, an event of cybercrime may be followed by several legal suits claiming negligence to protect sensitive data and inferior privacy policies. Such costs are covered under the policy.
Cyber Liability policies also cover regulatory costs such as fines or penalties imposed on an organisation by regulatory agencies. The cost of hiring a lawyer to oversee such proceedings is also covered.
Some policies may cover the cost of crisis management following the event of the crime. It includes goodwill management and marketing to restore the company’s reputation.
The need for Cyber Liability Insurance
The present world where most businesses have moved to digital platforms, data is considered to be the most valuable asset. As a result, there are hackers who are constantly trying to get their hands on this digital treasure. It is the need of the hour to complement the business efforts with a comprehensive Cyber Liability Insurance Plan. An ideal CLI policy must be based on factors such as business severity, type of industry, revenue system, infrastructure, and the sensitivity level of the data.
Whether you are planning to start a business or currently serve customers, one of the most important things you must invest in is a Cyber Liability Insurance policy. You should look for a policy with a high premium amount, as they are the ones that provide the highest coverage. As it is said, the business being profitable is directly proportional to the degree of the data protection, best served by a CLI policy.