Naavi has been highlighting the need for Indian Banks to obtain Cyber Crime Insurance as suggested by RBI in 2001 and ensure that customers are spared from the phishing liabilities. However Banks have been generally reluctant under the ground that such covers are not available.
However it appears that more and more Insurance Companies have started offering Cyber Crime Insurance policies which has changed the scenario. Perhaps the first company which was heard of issuing Cyber Crime Insurance in India was HDFC Ergo.
The latest report in Business Standard indicates that Bajaj Allianz General Insurance and ICICI Lombard are also in the fray with some policies which may address the needs of the market. According to Bajaj Allianz General Insurance, Cyber Liability can be covered under the “Professional Indemnity Policy” as an extension and such policies would cover third party claims arising due to negligent transmission of a computer virus, misrepresentation, defamation,confidentiality breach, intellectual property infringement and elated exposures.
ICICI Lombard states that their policy covers “Privacy Breach Liability”, “Cyber Extortion”, “Business Interruption Losses”, “Liability from multimedia and public relations costs”,”Legal expenses”and “data Theft liability”. The premiums are said to be around 0.5 to 1.5% of the amount insured.
Tata AIG Insurance covers the liability of a Director or an officer against risks of negligence resulting in liabilities in Cyber Crime incidents under the “Director’s Officer’s policy”. A more comprehensive cover is also said to be available under “it-internet liability coverage” which protects the insured from damages arising from a breach of duty in the operation of an internet, intranet or extranet site, transmission of electronic mail or documents by electronic means or the unintentional transmission of a computer virus.
Reliance General Insurance indicates a preference for customized extension of Director and Officer’s liability policies rather than standard policies.
According to Bharti AXA General Insurance,apart from companies, even government of India is quite serious on this matter and is working with various industry bodies like NASSCOM. on a proposal to mandate hardware vendors to provide cyber security awareness brochures along with the products they sell in India, which will go a long way in creating awareness on cyber threat. May be they consider such moves to increase the demand for Cyber Crime services in the future.
It is a good sign to observe that at least three or four choices are now available to Banks to cover their Cyber Crime losses. RBI should therefore ensure that all Banks confirm if they have obtained necessary cover as directed by RBI in its Internet Banking Guidelines of June 14, 2001. Failure to comply with this important regulation should be considered as a serious negligence inviting disciplinary action by way of penalties from the regulator.
According to KPMG’s annual electronic crime report of 2011, cyber liability insurance is still to gain currency with businesses, despite the rising risk. It indicated that 78 per cent of the 200 senior security managers from global businesses indicated that their companies either did not have insurance or that they were not aware if their companies had any cyber insurance, despite more than half seeing an increase in cyber crime risk over the past 12 months.
May be the situation appears to have improved in the last two years as indicated by the recent news report of Business Standard cited here.
Wide availability of Cyber Crime insurance will make a huge difference to the life of Netizens who are today forced to accept technology intrusion into their life. It is also likely to provide a boost to the Information Assurance industry in India. We can therefore look forward to some interesting developments in this area in the coming days.