An insurance for threats from the cyber world

Under the identity theft, social media and cyber stalking covers, insurer covers costs of prosecuting a criminal case against the concerned third party. In the IT theft loss cover, you can claim damages against a financial institution or payment system operators. 

Let’s take a person who has saved credit card details in a computer, and these details get stolen and are used for fraudulent transactions. “Upon investigation, if the culprit gets caught and the policyholder decides to file a criminal suit, insurance company will pay for prosecuting the claim," said Sasikumar Adidamu, chief technical officer, Bajaj Allianz General Insurance. Any financial loss suffered by the policyholder, subject to sum insured limitations, will also be covered. 

The malware, phishing, email spoofing and cyber extortion covers take care of losses due to these activities. 

The policy also covers costs incurred for psychiatric or psychological counselling for stress or anxiety resulting from the covered events. 

However, all these costs covered have a sub-limit. Except IT theft loss cover, phishing cover and email spoofing cover, which have a sub-limit of 25%, 25% and 15% respectively, all other covers have a sub-limit of 10%. Further, only one kind of claim can be raised at a time.  

The policy will not cover ‘dishonest or improper conduct’, which means deliberate, criminal, fraudulent, dishonest or malicious act or intentional violation of any duty, obligation, contract, law or regulation or any losses that are caused intentionally and against the law. 

However, if the insured is accused of improper behaviour and final decision of a court is pending, the insured can claim cost of defence. If the court establishes improper behaviour of the policyholder, the money will have to be repaid to the insurer. 

The policy also defines ‘duties of the insured’. These include measures by the insured to avoid any cyber attack, such as: having an updated antivirus, regular backup of data, and employing ‘best practices’ for passwords. Failure to observe these can jeopardise your claim, though the insurance company can waive these conditions. 

Your need for this policy would depend on your exposure to social media and cyber-world, said Akshay Garkel, partner, Grant Thornton India LLP. “As a end user, I would subscribe to this policy. Though I would go for a basic policy initially. To quantify what amount will be sufficient is difficult. My exposure to social media and internet and dependence on it is proportional to the cover that I should subscribe to," he said.

“The exclusions are very subjective and have open-ended terms and can have multiple interpretations. More clarity on these could be helpful," he said. 

If the exclusions are a worry, Garkel said that the best way to deal with those is to approach the cyber cell of law enforcement. If it accepts your complaint and certifies it as valid, you have a stronger case.