Insurance
•02 min read
Welcome to our brand-new series, A-Zs of Insurance. In this series, we will venture into the world of insurance to breakdown insurance jargon for you, so you’re empowered to make informed decisions about your financial security.
Recently, a woman from Noida was duped by scamsters posing as police officials, who implicated her in a false money laundering case. The criminals used different tactics to prove their legitimacy, citing names of an IPS officer and airline founder, interrogating her over Skype, and more. She was ‘digitally arrested’ and asked to pay approximately Rs 11 lakhs to clear her name. [Source: TOI]
Between 2021 and 2023, India lost around Rs 10k crore to cyber-crimes. [Source: TOI]. Unfortunately, such occurrences of digital crimes have become so common that we get to see such headlines quite often.
With cyber criminals using more sophisticated methods of siphoning your hard-earned money, it has become increasingly hard to steer clear of fraud and scams. The use of AI, advanced hacking mechanisms, phishing attacks, make us more vulnerable than ever. However, our lives are integrated with the internet at every avenue: from groceries to transport to banking, and more. There is no way for us to remain disconnected.
This may be worrying, but there’s an effective way to protect yourself from criminals online.
That is cyber insurance.
Cyber insurance protects you from financial losses that happen due to digital attacks, like impersonation, hacking, loss of personal data, etc.
A cyber insurance policy steps in to help you deal with financial setbacks in cases where you find yourself to be the victim of a cyber-crime. If such an incident leads to the loss of money, cyber insurance steps in to compensates you.
Let’s say, Aryan, a 35-year-old man living in Bangalore, receives a call saying that his sister has met with an accident and needs immediate hospitalisation. The caller asks Aryan to send Rs 30,000 for emergency treatment. Panicking, he transfers the money, only to realise later that he’s been told a fabricated story.
To mitigate this, Aryan raises a claim under the cyber insurance policy he owns, by reaching out to the insurer with details of the crime and the required documents (claim form, FIR, bank statement, etc.). The insurer appoints a cyber expert to analyse the crime. After investigation, Aryan’s claim is determined to be admissible, and he’s compensated for the financial loss.
In essence, cyber insurance is a great shield to have, now that online scams and attacks are rising rapidly. It’ll help you get back on your feet faster.
A wide variety of digital attacks, including online fund theft, identity theft, cyber bullying, hacking, phishing, etc., are covered by cyber insurance.
Some of the important covers include -
Theft of funds because of malware, viruses, trojan, etc., received via SMS, downloaded programs, and more.
Theft of funds due to hacking, phishing, spoofing, etc.
Not only does cyber insurance cover digital fund loss, but it also takes care of associated legal costs, bank charges, and more.
Note: This coverage can vary, depending on the cyber insurance product you choose.
Cyber insurance doesn’t cover -
Negligence or not taking enough security measures
Physical loss or theft
Withdrawal of funds via ATM by a third party
Fraudulent or criminal acts by the insured
Currencies not recognised by the RBI, including Bitcoins.
Note: This is not an exhaustive list of exclusions. There vary, depending on the cyber insurance product you choose.
