In India, under cyber insurance for individuals, which of the following benefits are generally covered, in addition to payment for the loss of funds and other benefits?

1. Cost of restoration of the computer system in case of malware disrupting access to one’s computer.
2. Cost of a new computer if some miscreant wilfully damages it, if proved so.
3. Cost of hiring a specialised consultant to minimise the loss in case of cyber extortion.
4. Cost of defence in the court of law if any third party files a suit.

Select the correct answer using the code given below:

1. 1, 2 and 4 only
2. 1, 3 and 4 only
3. 2 and 3 only
4. 1, 2, 3 and 4

Explanation

Option (b) is correct

• As per these guidelines issued by Insurance Regulatory and Development Authority a cyber insurance policy will provide coverage against the following:
  • Theft of funds: Provides protection in respect of theft of funds due to cyber incidents or Hacking of insured’s Bank account, Credit/Debit card and/ or Mobile wallets by a Third Party.
  • Identity Theft Cover: Provides protection in terms of Defence cost for claims made against insured by third/affected party due to identity theft fraud, provides expense to prosecute perpetrators and other transportation costs.
  • Social Media Cover/Personal Social Media: Provides protection in terms of Defence cost for claims made against insured by third/affected party due to hacked social media account of insured, provides expense to prosecute perpetrators and other transportation costs
  • Cyber Stalking / Bullying: Provides expenses to prosecute the stalker.
  • Malware Cover / Data Restoration Cost: Provides coverage for data restoration cost due to malware.
  • Phishing Cover: Provides protection in respect of financial losses as a result of a phishing attack and provides expense to prosecute perpetrators.
  • Unauthorised Online Transaction: Provides protection against fraudulent use of bank account, credit/debit card, ewallet by the third party to make online purchasing over the internet.
  • Email Spoofing: Provides protection in respect of financial losses as a result of spoofed email attack and provides expense to prosecute perpetrators.
  • Media Liability Claims Cover: Provides coverage for defence costs in third party claims due to defamation or invasion of privacy due to Insured’s publication or broadcasting of any digital media content.
  • Cyber Extortion Cover: Provides protection for extortion loss as a result of Cyber extortion threat and provides expense to prosecute perpetrators.
  • Data Breach and Privacy Breach Cover: Provides indemnity for defence costs and damages in respect of claims lodged by a third party against the Insured for Data Breach and or Privacy Breach.
• Types of losses under cyber insurance: Losses covered under a cyber insurance policy can be split into 4 categories:
  • First Party Losses: Direct Financial Loss, Data recovery, Business Interruption Cover and Mitigation Costs Cover.
  • Regulatory Actions: Costs of Regulatory actions and investigations, Civil fines and penalties and Defence Costs.
  • Crisis Management Costs: Forensic Expert Cover including security consultation, Reputation Damage Cover, Legal Costs Cover for matters including notification, coordination with service providers, strategy, etc., Credit and Identity Theft Monitoring Cover, Cyber extortion/ Ransomware Cover, Operation of a 24×7 Hotline, Cyber Stalking, Counselling, Information removal and pursuing action.
  • Liability Claims: Legal liability/damages directly arising from privacy or data/ security breach, Defamation, Intellectual Property Right (IPR) infringement and Defence Costs.

Answer: (b) 1, 3 and 4 only; Difficulty Level: Medium