Coronavirus pandemic among other fatalities has triggered spurt in cyberattacks. Cyber criminals are exploiting the COVID-19 outbreak as an opportunity to use digital fraud techniques to steal funds of people by claiming to have important updates or encouraging donations, impersonating trustworthy organizations etc.
Basically, in the world of Internet, we are all at risk and at the same time we are also a risk to others. This kind of scenario is keeping everybody guessing as cyber frauds have become order of the day. The risk of stealing credentials of the browser is widespread which the fraudsters then use for everything from finance fraud to outright identity theft.
So, in a scenario like this, we can at least protect ourselves from others. However, the most important task is to protect ourselves from our own actions. A most common advice on protecting yourself against the cyber frauds is to have a better understanding of what the online threats are. Even as measures are in place and are continuously being upgraded to insulate browsers against cyber frauds, the social engineers prove too fast in innovating new online techniques to defraud people.
Mostly these cyber frauds ultimately end in a financial fraud. Now the point how to get protection against cyber frauds when protective measures already in place too fail to insulate you against a cyber fraud.
Here, it’s the cyber insurance cover which is the need of the hour. Given that more people are using smart phones and financial transactions via Internet and mobile are rising, cyber insurance should become a ‘must-have’ in an financial plans of organizations as well as individuals.
What is cyber insurance?
It is an insurance product designed by the insurance companies to protect a company or organization from various cyber risks. In other words, cyber insurance provides protection and coverage for the security and privacy of digital information and losses resulting from data breaches.
What does it actually cover?
A cyber insurance cover protects cyber risks like unauthorised online transactions, phishing, email spoofing, e-extortion, identity theft, damage to e-reputation and cyber-bullying. It evens covers legal expenses in case of a legal dispute arising out of specified risks covered in the policy.
Notably, these policies provide both first party and third party coverage. Cyber insurance may take the form of a stand-alone policy or be made available by way of endorsement to a D&O or E&O liability policy. Each policy varies.
Even as the insurance coverage is only for incidents that involve electronic hacking or online activities, such insurance policy also covers private data and communications in many different formats, be it paper, digital or otherwise. In simpler terms, a cyber insurance policy covers liability claims involving the unauthorized release of information for which the organization has a legal obligation to keep private or confidential. The policy also covers liability claims involving breach of privacy, copyright/trademark violations in an online environment.
Most insurers also offer value-added services, such as network security testing, designed to help companies avoid and mitigate the effects of a data breach, and crisis management services.
What is covered in first party coverage?
Typically, it includes expenses incurred by a company as a direct result of the breach, including remediation and notification expenses, as well as crisis management expenses; and resultant costs such as business interruption and loss of goodwill.
What is covered in third party coverage?
Third party coverage under a cyber insurance policy typically provides coverage for liability in connection with losses suffered by customers as a result of the theft and use of their personal and/or financial data.
What is personal cyber insurance?
These are the policies offered by the insurance companies to individuals. Typically, a personal cyber insurance product should, as a minimum, cover the cost of any financial losses of an individual due to financial fraud or ID theft; any cyber extortion fees; and the costs of any IT specialists removing malware from devices and replacing any lost data from your computer operating system.
Should you buy a personal cyber insurance policy?
Frankly speaking, buying a personal cyber insurance product would be an expensive affair. Still you can analyze at your own end whether it’s actually worth it to purchase for you. Here you will have to do a little cost-benefit analysis, because you might be paying for something that you don’t really need.
Moreover, just check whether your bank has got the cyber insurance cover or not. Many financial institutions provide free fraud alerts for their customers. As already stated above, third part coverage under a cyber insurance policy typically extends coverage for liability in connection with losses suffered by customers of the organization as a result of the identity theft and use of their personal and financial data.
(Inputs from an insurance expert)