Skip to main content

Cyber liability insurance

      Cyber liability insurance                                                                        

Digital transactions have taken over our everyday life. The era of PINS, passwords, OTPs are facilitating ease of doing business in all spheres. In the process we are divulging personal and important data, which is sometimes exposed to “experts” in IT.

For companies, funds, transfers and money transactions are voluminous hence a strong IT policy will secure their financial data. However, loss may occur from various quarters.

Data breach can happen from:

Employees: Physical theft, negligence, phishing, sending wrong data

Outsiders:  Crime syndicate, hackers

Vendors:  Data centers, cloud

Cyber-attack: A targeted intrusion into the insured’s computer system which results in:

a)    Transmission of unauthorized data to the insured’s computer system or from the insured’s computer system to a

third party’s computer system that modifies, alters, information without authorization.

        b)    Corrupting other computer programmes or legitimate computer data

        c)    Obtaining unauthorized access or use of the insured’s computer system

What is a loss:

Loss means:

a) Direct financial loss

b) Damages: Claims which the Insured shall be legally liable to pay to a third Party in respect of judgments or court awards rendered against an Insured;

c) Defence costs: Costs for Filing Claim for Damages on Third party /Financial Institution

f) Restoration costs: Expenses incurred due to malware

h) IT theft loss


Other losses:

Loss of customers/revenue

Damaged reputation/brand

Liability from class action lawsuits, regulatory actions and fines/penalties

Shareholders suits

Punitive or exemplary damages

Company has a huge task of restoring the business to normalcy in the face of mounting claims from all stakeholders.

 How to secure from such threats:

A comprehensive Cyber Insurance Cover protects against such cyber risks to ensure that both the financial and reputational repercussions of a breach are effectively managed.

 What is covered:

Ø  Data liability covers:

•      Loss of personal & corporate Information

•      Outsourcing: Claim by a third party against an outsourcer for breach of personal or corporate information                             

•      Network security: Claim by a third party caused by any act, error or omission resulting in:

a)  Introduction of computer code or virus to third party data by the company’s computer system.

b) Destruction, damage or deletion of third party data stored on any computer system due to virus etc.

Ø  Administrative expenses:

Legal fees incurred in connection with a regulatory investigation

Fines resulting from a regulatory investigation 

Ø  Reputation and response costs

•      Professional fees of cyber risk specialists for determining cause of loss and remedial measures

•      Professional fees of lawyers, crisis consultants and PR consultants for restoring the company’s & individual reputation

•      Costs associated with notifying data subjects & regulators that data has been breached

•      Credit monitoring services for possible misuse of any personal information as a result data breach

•      Professional fees to determine whether data recreation and recollection of damaged third party data can or cannot be restored to recreate data

Ø  Multimedia liability: Claim by a third party against the company solely in the performance of or failure to perform multimedia activities arising from the following alleged or actual wrongful acts:

a) defamation

b) unintentional infringement of copyright, title, slogan, trademark, trade

Ø  Cyber/privacy extortion: Extortion that an insured incurs solely as a result of an extortion threat.

Ø  Network interruption: Interruption the service provided by the computer system directly caused by a security failure.

Cyber Liability policy addresses all these issues and is a sure remedy and security to mitigate unforeseen losses.

 

Disclaimer:   

Zen Insurance is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the products.

 

  

Comments

Post a Comment

Popular posts from this blog

AOG (Act of God) Perils Extension in CGLpolicies

      A OG (Act of God) Perils Extension in Commercial General Liability (CGL) policies refers to the inclusion of natural and unpredictable events under the coverage of the policy. AOG perils are events beyond human control, often caused by natural forces, and their inclusion can significantly broaden the scope of a standard CGL policy. These perils are not covered automatically in a CGL but have to be purchased separately as an add-on. Let us look at this aspect of CGL policies in more detail. Indian firms looking to buy a CGL policy should ideally opt for an AOG perils extension because the country is geographically prone to various natural disasters such as earthquakes, cyclones, and floods. Including AOG perils in a CGL policy will help businesses in disaster -prone areas to protect against liabilities arising from damage or injury caused during such events. AOG Perils covered in a CGL policy Earthquake Floods (including inundation, cloudburst, etc.)...
Post a Comment
Read more

Prior and Pending Litigation in Professional Indemnity Policy

  The prior and pending litigation exclusion in liability policies is a clause designed to exclude coverage for claims related to legal disputes or circumstances already known, pending, or in progress before the policy's effective date. It’s an important exclusion because it limits the insurer’s liability for events that occurred before the policy began. Here are more details about this exclusion. Purpose of the Prior and Pending Litigation Exclusion Insurers include this exclusion to avoid covering claims or disputes that were known or existed before the policy started. It ensures that the underlying policy , Directors & Officers (DnO), Professional Indemnity (PI) policy, etc., only covers new claims that arise from professional errors, omissions, or negligence occurring during the policy period and not pre-existing or ongoing legal matters. What the Exclusion Covers Prior Litigation : Any lawsuit, claim, investigation, or l...
Post a Comment
Read more

Understanding Duty to Defend and Right to Defend in Liability Insurance in India

  In a liability insurance policy, the insurance company has the duty and also the right to defend the insured. The cost involved in defending the insured does not affect the policy limits provided the policy does not state otherwise. This rule is useful because in many cases the defense costs are high when a judicial trail is involved. In some cases, the defense costs can be higher than the claim amount making the defense part of the policy more valuable. Defense costs can be higher than the claim amount particularly in nuisance cases. These are situations where a case is made against the insured party even though the liability is low. The coverage of a claim under a liability policy can vary based on the duty to defend or right to defend clause. Before buying a liability policy, one should know the difference between duty to defend and right to defend and the obligations of the insurer under each wording. Duty to defend Under the duty to defend provision in a liability in...
Post a Comment
Read more