FIRMS LOG INTO INSURANCE TO CUT CYBER CRIME LOSSES

With the incidents of cyber crime on the rise especially in industries like banking, IT/ITES, BPO/KPO, the corporates have started opting for cyber crime insurance.
Currently, some middle and large sized companies buy this insurance either as a standalone policy or bundled policy for covering cyber crime losses. The average amount insured starts from $5 million and goes up to $50 million and the cost of premium ranges between 0.5 to 1 % of the sum insured and in some cases can go up to 5%.

Discussing about the growth of such plans, Rahul Aggarwal, CEO click2insure.in told FE that cyber crime is a menace for any organisation transacting business through internet. He said, “Despite best efforts the technical systems with the organisations are not adequate to tackle industrial and commercial espionage leading to cyber crimes. But as huge losses occur due to distortion of data the big firms have started taking cyber crime insurance seriously. HDFC General Insurance, Tata AIG and ICICI Lombard. Companies like HCL infosystems, Annik Technologies, Nucleus Technologies, Punj Star, NIIT, etc. have already adopted this policy. But the small and medium companies are yet to wake up to this product.”
Cyber crime insurance policy depends upon the security infrastructure, outsourcing and testing process of the organisation concerned. Rahul further added, “There are two types of covers for direct losses to the company (first party loss) and the other one for third party losses. The typical risks covered in cyber insurance include frauds like stealing credit card data, banking account details, identity thefts, hacking etc.”

Source: The Financial Express