Phishing in troubled waters? Take cover in cyber liability, say experts

Protect family's data, finances; consider floater cover as well

Since the onset of the pandemic, and with more people adopting the digital payment route, the incidence of online frauds through malware, phishing, and identity theft has risen worldwide, and also in India.

A recent online survey of over 4,500 respondents by PolicyBazaar showed that nearly 20 per cent of them had suffered a financial loss due to cybercrime. However, only 24 per cent had purchased a cyber insurance policy. The survey also revealed that financial loss due to unauthorised transactions is the threat most respondents (57 per cent) want covered through cyber insurance. 

With more people working from home, the need for a family cyber cover has grown.

Soayib Qureshi, associate partner, PSL Advocates & Solicitors, says, “India is second only to China in terms of number of online users, estimated at above 700 million currently. Protection of their data has become a priority.”

A must-have cover

Anyone who’s a part of the digital world is at risk in cyberspace.

T A Ramalingam, chief technical officer, Bajaj Allianz General Insurance, says, “We now spend a substantial amount of time on our devices for various daily requirements like mobile and internet banking, online payments, e-commerce purchases, social media consumption, and entertainment on over-the-top platforms.”

Lovaii Navlakhi, board member, Association of Registered Investment Advisers, says, “Everyone who is exposed to digital platforms needs to protect themselves by purchasing cyber insurance. For those who are more susceptible to frauds, like senior citizens, this cover is a must.”

New users of the internet are also susceptible.

“Cyber insurance cover offers coverage against cyberattacks and threats. It helps customers reduce the impact of losses in case any vital financial, or other sensitive information is stolen or misused,” says Ramalingam.

What’s available

Currently, Bajaj Allianz, ICICI Lombard, HDFC Ergo, Future Generali, and SBI General Insurance (which launched its policy on Tuesday) offer this cover. 

Naval Goel, chief executive officer and founder, PolicyX.com, says, “The plans are made for individuals. They can be topped up with covers to protect the spouse, children, and other family members.”

Consider a family cover as nowadays almost every family member goes online. A family floater is also less expensive than buying an individual cover for each member.

The covers from various players are broadly similar, although their finer details may vary.

Evaa Saiwal, practice leader–liability and financial risk, PolicyBazaar, says, “Some insurers provide specific plans that target different user groups, such as students, entrepreneurs, families, and salaried professionals, while the others offer a personal cyber insurance with sum insured.”

Coverage and exclusions

These policies cover policyholders for losses resulting from fraudulent transactions over the internet, which hit bank accounts, credit or debit cards, and mobile wallets.

“Any data breach, ransomware attack, cyberbullying, malware intrusion, or extortion event is covered by this policy. It also covers expenses related to investigation, forensic costs, data recovery, and information technology consultancy services,” says Saiwal.

If the policyholder has to consult a psychologist to deal with the trauma or stress arising from such incidents, the cost of doing so is also covered. 

“This policy generally covers all devices you utilise to access the internet. Some insurers offer worldwide coverage,” says Goel.

Cyber insurance policies come with a few exclusions which policyholders should be aware of.

“Dishonest and improper conduct, bodily injury, property damage, unsolicited communication, unauthorised collection of data, and immoral or obscene services are not covered,” says Ramalingam.

Delay in purchase can be costly

Experts suggest buying cyber insurance cover, especially for those working from home (WFH).

Kapil Mehta, co-founder, SecureNow, says, “These plans are particularly relevant for people who spend a lot of time online and work using online resources. This segment has increased considerably over the past few years because of WFH. It is a cost-effective cover. For Rs 5,000, you can get a reasonable amount of protection.”