Cyber insurance: Protection against cyber crime

The digital world is getting riskier by the day with increasing incidences of virulent cyber attacks happening every day across the cyber world. The recent attack by the ransomware WannaCry created a worldwide sensation and laid bare the vulnerability of digital systems and networks. It proved that individuals, institutions, corporates, governments, banks and all other organisations relying on digital mode of data storage and transmission and engaged in digital transactions are exposed to the threat of cyber attack. A cyber crime usually takes the form of hacking, stealing, damaging or erasing the data stored online by the victim.

However, one can now protect oneself against such cyber attacks by buying insurance cover against cyber crime. Insurance companies offer cyber insurance cover that protects the insured against any loss caused due to cyber crime. The types of cyber crimes covered by the cyber insurance policy include phishing, malware attack, identity theft, financial loss due to online fraud, cyberstalking and cyber extortion.

In the case of a person who has become a victim of phishing, the insurance company pays for the financial loss and also incurs the cost of filing criminal complaint against the criminal. In the case of cyber extortion, the company pays the cost of hiring a cyber crime specialist so as to mitigate and minimise the loss.

In the event of an identity theft and hacking of an individual or organisation’s account, the insurance company pays the cost of filing criminal complaint against the person accused of committing the crime.

In case of malware attack causing damage to the computer system or preventing access to the data stored in the computer, the insurance company pays for the restoration of the computer system, data and software. The insurer also pays the legal fees to the policyholder to defend himself in a court of law against any complaint filed by a third party for loss or breach of their data.