Technology has transformed the way businesses work now

has transformed the way businesses work now days from providing services to
customers online to storing data in clouds but it also brings risk to the
businesses as well as the individuals. The services, the users, the business
owners, non-commercial organizations and the individuals all are susceptible to
growing risks like data breaches, liability arising out of cyber-attacks, liability
arising out of disclosure of confidential and sensitive information. In order
to counter the risk associated with such threats, Cyber Insurance is necessary.
Cyber Insurance does not protect from cyber-crimes but it can provide relief in
terms of financial funds being spent to combat cyber-crimes.

insurance or cyber risk insurance policy is basically a policy which helps the
organizations and the individuals to protect them from internet based risks or
more generally from Information Security Breaches by offsetting costs involved
in the recovery of businesses and individuals  after cyber- security Incidents. Cyber Insurance
mainly covers expenses relating to first parties as well as claims by third
parties. Cyber Risk Insurance Policy being alike other insurance policies yet
there is no standard that defines writing the policy, so the scope of the
policy still remains within the ambit of insurance companies but generally the
insurance companies provide protection and benefit to the organizations as well
as individuals by following reimbursable expenses i.e.  

Business Losses and Interruptions: Cyber Insurance Policy may include
related items as of errors and omission policy (E&O policy) as well as monetary
losses that organizations as well as individuals suffer due to data loss
breaches, confidential information leaks, cyber defamation, etc.


Extortion: Cyber Insurance Policy covers the
threats associated with the policy holder’s business that are given by the
extortionists which threaten to commit cyber-attacks.



Investigation: Covers the technical, legal or
forensic services necessary to assess whether a cyber-attack has occurred, to
assess the impact and to stop an attack. Investigations may involve the
services of a third-party security firm, as well as law enforcement.


loss and Restoration: Covers damage to computer-related
assets, including the costs of data recovery and restoration of hardware,
software or other information destroyed or damaged as the result of a cyber-attack.



Ending the Gap Between Traditional Coverage and Current
Traditional insurance only covers
the liability arising out of ‘tangible property’ but cyber insurance covers the
gap between the traditional policies and currently needed policies.


With the increasing complexity and
likelihood of data breaches, organizations and individuals are finding cyber insurance
as a measure of security. Cyber insurance covers first-party losses and
third-party claims, but general liability insurance covers only property damage.
Cyber insurance, unlike traditional insurance, is designed to meet the needs of
companies in the digital age.