Two neighbours’ daily routine of watering plants leads to an interesting conversation

Sindu: I got an email for buying quality seeds online and I was giving all the details, because I thought it was a reputed source. But I ended up losing money. I didn’t even know it had happened until it was too late! But, I think my insurance will cover for this.

Bindu: What? There is insurance against online scams?

Sindu: Yes, cyber insurance. It protects businesses and individuals against online risks such as data breach, identity theft and unauthorised transactions. It covers financial losses depending on the cyber incident. For instance, if you are a victim of unauthorised online transaction and as a result you have lost money, then cyber insurance will cover you up to the sum insured. Provided the money lost is not recoverable, legally.

Bindu: Okay. Does it provide any other coverage?

Sindu: Yes. Now, if you take it to court to fight a legal battle, then the policy also covers cost incurred in prosecuting a criminal case and other legal expenses related to the cyber-attack.

Further, it also covers the cost of employing IT services to recover the lost data.

Bindu: This is good news! But you know, even if the losses are covered, these cyber attacks affect you mentally.

Sindu: Guess what? If policyholders require medical counselling, insurers do offer to cover the cost of the same, up to the sum insured.

Bindu: Wow! Looks like it is a must have.

Sindu: It may appear so. But cyber insurance policies have their own limitations. They come with sub-limits, deductibles and waiting periods that usually vary with cyber threats and with each insurer. Policyholders are expected to adhere to certain protocols such as constant updating of software.

Bindu: Update the system? So what happens at the time of claim, otherwise?

Sindu: Well, post the cyber attack you should inform the insurer. Now, if you fall behind on your due diligence such as software update, installing anti-virus or other such protection software , you may not be able receive your claim. One of the most important points to note is that, a policyholder can claim only for one event, even if the one event, say, malware attack, triggers multiple events such as hacking, phishing or unauthorised transactions.

Bindu: I knew it! It was too good to be true. But at least, we have many options.

Sindu: No, in India only a few insurers offer this product. These are new to the industry and yet to evolve and widen the scope of coverage.