Why in news?  As there is an increased cyberattacks targeted small businesses and start-ups , it resulted in a need of establishing  cyber insurance from cyberattacks.

Highlights:

What is cyber insurance?

• Cyber insurance generally covers your business’ liability for a data breach involving sensitive customer information, cyberattacks, intellectual property losses, cyber-safety hazards and financial fraud, etc.
• The policy is now gaining popularity in India as it covers the expenses of investigating and repairing damages such as restoring lost data, incurring forensic costs, providing indemnification for lawsuits, compensating clients for any loss resulting from cyber incidents.

What are the kinds of coverage ?

• First-party cover shields the business from costs incurred when it is afflicted by fraudulent activities such as a data breach.
• Third-party cover offers protection from legal liabilities arising from any third party, including insured’s customers, suppliers, business partners, and other stakeholders in the event of they suing the organisation for data breach and mishandling their data.

What is covered?

• Some common costs covered in the policy are legal and legal representation costs, cyber extortion payouts, business interruption costs, administrative investigations, data recovery and reconstitution costs, forensic costs etc.

What is not covered?

• It excludes violation of contracts, breach of trade secrets and trademarks, and disputes over registered patents or intellectual property.
• Property damage, harm, or injuries caused due to negligence, lack of precaution to safeguard confidential banking information, etc., are also not covered.
• Ongoing and uninsurable legal cases and physical injury, death, or damage to any tangible object remain uninsured.
• Cost of a new computer if some miscreant wilfully damages it, if proved so