To put it simply, Cyber Insurance refers to the insurance that covers the risks associated with cyberspace. Use of Internet in the business world is quite extensive, & as such the risks with computers are also many. To protect your business from such cyber risks, it is essential to avail Cyber Insurance. As per the figures published by UK government recently, the yearly losses suffered by businesses due to cyber crime amount to about 27 billion. The worst thing is that many countries across the world have been hit by cyber crime, whether we talk about U.S or India even.
Different kinds Of Cyber Risks
Broadly speaking, the list of cyber risks is quite extensive & may require a whole new article to discuss the topic in detail. Some of the common cyber risks include:
- Cyber Spying
- Intellectual Property theft
- Damage to Systems by virus, malware, & such
- Loss of productivity by hacker attacks.
- Privacy infringement
Cyber Insurance Contract
In case an insurance holder suffers any loss due to the cyber risks mentioned above (or any other kind of cyber crime detailed in his policy), then the insurance company is liable to pay him compensation. This compensation is referred to as the Claim. The amount to be paid out to the insurance holder is calculated on the basis of several factors, but the conditions are cleared stated in the contract. On his part, the insurance holder is bound to pay a monthly premium to the company.
Before Availing Cyber Insurance: Points To Consider
- First of all, a proper inventory of all important information held in the form of electronic data must be compiled. Then an assessment should be done to calculate its value in monetary terms. Another assessment that needs to be done is to ensure what kinds of checks are in place to prevent misuse or loss of this data.
- Another essential thing is to ensure that proper measures are in place is that the employees of the organization do not divulge sensitive information to outsiders.
- Another point to ensure is that in case of a cyber crime situation, what kind of back-up plans does your company has in place.
With most companies having an online presence & carrying out trade in a cyber environment, it has become essential for all such entities to avail Cyber insurance, in order to protect themselves from any kind of cyber crime.