Indian companies are increasingly suffering huge losses due to rising cyber attacks that leads to interruption of business and loss of customer data.
However, with only 100-150 policies covering cyber #crime liability insurance being sold in the country, majority companies are inadequately protected against the growing menace, according to #insurance companies.
Financial sector that carries out financial transactions and handles cash is among the high-risk targets, but most banks in India, barring a few large private lenders, do not have cyber crime liability #insurance.
Industry officials said this could potentially lead to heavy business losses if the computer systems are hacked and customer data is stolen.
The #cyber liability insurance coverage is the lowest in the hotel and hospital sectors, which has critical data on customers, which if hacked and stolen, can have devastating impact on clients and patients, and threaten the business itself.
Sushant Sarin, senior vice-president – commercial lines, Tata AIG #General Insurance Co, said, “While cyber crime insurance is a widely bought cover which takes care of monetary loss arising out of the loss of financial data, cyber liability insurance related to hacking of computer systems leading to business interruption, loss of customer data, bank data and patient data is a slowing moving product with very few companies buying such covers. Health records in certain cases if made public can have a devastating impact on your health. We sell about 30- 35 cyber liability insurance policies in a year.”
According to home ministry statistics, there have been 62,189 incidents of cyber frauds till June 2014. About 28,481 websites were hacked in India in 2013 and cyber crimes have cost India Rs 24,630 crore in 2013, according to a Delhi High Court-commissioned report. India is ranked as one of the top three targets in cyber crime. According to available statistics, about 71,780 cyber frauds were reported in 2013, while 22,060 such cases were reported in 2012.
Tanuj Gulani, vice-president – speciality lines & reinsurance, Prudent Insurance Brokers, said, “New-age businesses like the e-commerce companies fear network breakdowns more than anything else. Still many e-commerce companies are not covered by insurance in India. The few policies sold in the country are bought by the BPOs and the software companies at the insistence of their foreign clients. The financial sector which transacts in cash and in financial documents of customers are by and large uncovered by cyber liability insurance covers.”
Cyber terrorism is ranked as high a risk as political unrest. Industry experts say it could have a debilitating impact on companies and individuals. For example, if customers information is compromised in the US, the company has to individually inform each customer and the cost of notifying a customer may vary from $10 to $30.
“The hacking business is said to be more profitable than the cocaine business as customer email is the repository of all sorts of data from private pictures to financial information like the bank accounts, credit card details. Even for the traditional brick and motor companies a cyber liability cover is important. It is electronically possible to control and blow up a steel plant,”adds Gulani.
In India, such cover is sold only by four companies — Tata AIG, which is the market leader, Reliance General Insurance, Bajaj Allianz and HDFC Ergo.
According to an Assocham and PwC report issued earlier this month, financial frauds leads to approximately $20 billion (Rs 1.26 lakh crore) in direct losses annually.
This excludes the e-commerce companies and the brick and mortar retailers, which would have had business losses due to hacking of their systems.
Curated From : Indian companies mostly uninsured against cyber attacks