India is rapidly moving towards a digital ecosystem. Even the remotest of area is connected with mobile devices and internet. India might be ready for a digital future but is it truly prepared to handle the unseen security risks?
Our cyber-security infrastructure is at a nascent stage and is evolving. As India is digitally transforming we are seeing increasing trend of companies migrating their data to cloud. With rising digitisation Indian businesses are increasingly becoming targets of various cyber threats and are running the risk of their data getting compromised. Many organisations may not have taken time to consider whether they have sound cyber-security mechanisms in place, but ignoring this risk could endanger their business operations. While large organisations are beginning to take preventive measures to protect themselves, small organisations normally tend to pay insignificant attention to risk assessment or have no funding to invest in risk mechanism. Wherein, this problem requires serious intervention from the C-suite members other than the IT team.
As per World Economic Forum global risks perception survey 2018–2019, 82% of the respondents expect Theft of data/money through cyber-attacks and 80% expect disruption of operations and infrastructure through cyberattacks in 2019. We frequently come across cases of cyber fraud or theft carried out globally, which is very shrewdly planned by hackers. They read and listen to everything and track you on a minute basis. Financial Services sector continues to be a prime target for Cyber and Data Breaches followed by IT and Telecom sector. Companies should be prepared for such instances by periodically assessing their overall cyber risk prole, investing in technology to protect company’s data and conducting IT security training.
Amidst this preparation, Cyber Insurance guards businesses from potential eects of cyber- attacks. Along with technical safeguards against data breaches, a cyber -insurance policy serves as a formidable bastion against a variety of threats, ranging from first and third-party risks to legal complications arising from loss of corporate information, personal data management etc. But, with cyber insurers probing possibilities of pre-purchase cyber risk assessment and Loss Control Services, the scope of such products has expanded beyond simple indemnification of losses. A modern cyber insurance package may also include services like reputation management, credit monitoring, costs to defend claims by state regulators, and penalties, loss resulting from identity theft and multimedia liability. Cyber Insurance cover also protects an organisation against financial losses resulting from malicious cyber events like Denial of Service (DOS) or a Ransomware attack.
Data aspects such as personal health information, personally identifiable information, payment card information, confidential customer information/research findings, data hosting or storage can be covered under Cyber Insurance.
Before investing in cyber liability insurance, it is crucial to undertake a holistic study of the capabilities and limitations of the organisational IT infrastructure, business commitments and budget. Based on this, a policy should be availed that adequately covers risks, including direct financial losses resulting from malicious activities and also indirect costs like those of legal proceedings, regulatory penalties, PR expenses etc.
It is essential to consider the limits of compensation and their availability in case of multiple security breaches at the same time. Additionally, attention should be paid to factors like whether the coverage is retroactive, offers full limits of all coverage, and whether it is extended to protect the vendors as well. Cyber liability insurance should eectively be an extension of the organisation’s cybersecurity strategy.
With a series of regulatory guidelines and directives in recent years, GOI has attempted to nudge the Indian companies towards cyber safe business practices. These diktats, with educational objectives, have made decision-makers conscious about committing resources for selecting the right cyber insurance products.
The digital wave is fueling innovation in the Indian insurance sector. Soon, our businesses are expected to have access to improved risk management solutions to aid in their cyber defense.