Personal Cyber Insurance – Introduction



Personal cyber insurance is a form of cyber insurance which has been designed to cover the risks at an individual level. Cyber insurance was usually thought to be suitable for companies and organisations to protect themselves from cyber attacks resulting in loss of data, hacking etc. But due to the advent of technology and infringement in one’s rights, it has become imperative for individuals to take a personal cyber insurance policy as well.

Here are the risks that are covered in a personal cyber insurance policy.

Theft of funds including unauthorised transactions:

The most common thing that could happen to any of us is theft of our hard earned money from our bank account without our knowledge. Personal cyber security insurance covers the financial losses arising out of phishing attacks, spoofing and unauthorised access. This cover would also cover the theft of funds from bank accounts, credit/debit cards and any digital wallets.

Identity theft:

Identity theft is when a third party misuses your personal information and creates a dummy profile with your details online and causes financial losses as well as create legal troubles. For example, a third party may create a social media profile in your name and ask for money from your contacts and your contacts may end up sending money to them as they believe it was from you. In addition to financial loss, you might also face credit monitoring costs, legal costs for prosecution and consultation costs for psychological related issues – these can also be covered under the policy.

Lost Data restoration:

The other advantage of personal cyber insurance is that it covers the cost incurred in recovering the lost data due to a malware attack. For example, when your devices are hacked with malware, hackers would sometimes tamper with your data and the devices inflicted with malware would need restoration and this would result in expenses which are covered under the policy. The policy also covers the replacement of hardware which would be damaged due to a malware attack.

Online fraud:

Now are the days where we deal heavily in online space, be it buying or selling online. For example, there could be certain websites where you have placed an order for a product and made the payment, but the product has not been delivered, because it was a fraudulent website. The other case, where you sell your product to an online buyer expecting a payment at a later stage, but find out that the buyer refuses to pay the amount. In both these cases, you would be losing money and a personal cyber insurance policy would help in compensating these financial losses.

Cyber bullying, stalking & Extortion:

The most common news we see these days is bullying or stalking by hidden cyber criminals using any online mode. For example, some cyber criminal might hack your phone using unauthorised means and access your personal data. The personal data may therefore be posted on social media or threaten to post online by the cyber criminals. Cyber insurance policy covers the legal costs, costs incurred by the insured in removing the objectionable content posted online in addition to the psychological consultation costs incurred by the victims.

Social Media Liability:

In this digital age of social media, the boundaries of privacy have become blurred and you might end up in situations where you need to defend yourself against third party claims of social media privacy breach or copyright violations. For example, you might post a social media post which might be violating a copyright of a third party, leading to a legal case. In such cases, the legal costs incurred by the insured would be covered under the personal cyber insurance policy.

Personal Network Security:

There could be instances where your wifi is hacked and through it nearby devices belonging to third parties are inflicted. In such cases you would be held responsible as the malware originated from your network and you would ultimately become legally responsible for the same. Therefore, personal cyber security insurance covers the legal costs you would incur in defending yourself from any of the third party claims.

Privacy breach by a third party:

The personal cyber security policy also covers the legal costs incurred due to privacy breach. Privacy breach could be either from your end or from a third party’s end. It could happen that you might have unintentionally leaked third party data from your devices/ accounts or it could happen that a third party leaked your personal and confidential information leading to privacy breach. In any case, personal cyber security insurance policy covers the legal costs arising out of such breaches.

  1. <strong>Can I individually take cyber security insurance?</strong>

    Previously, cyber security insurance was only taken by organisations, but now it has been extended to individuals as well.

  2. <strong>Who can take a personal cyber insurance policy?</strong>

    Any individual above the age of 18 years can take a personal cyber insurance policy. It is not necessary that an individual should use social media or electronic items to be eligible for this policy as the data breach could happen even without using social media and electronic devices.

  3. <strong>What is the policy period for personal cyber insurance policy?</strong>

    Personal cyber insurance policy is valid for 1 year after which it can be renewed by the insured customer based on their needs.

  4. <strong>What is the minimum and maximum sum insured under personal cyber insurance?</strong>

    The minimum and maximum sum insured under personal cyber security insurance would be Rs.10,000 and Rs.5 Crore respectively. The maximum sum insured could be extended based on the requirement of the insured.

  5. <strong>Can I take one policy for all my electronic devices or should I take separate plans for each?</strong>

    You can take a single cyber security insurance policy for all of your electronic devices. This is the advantage offered by most insurance companies in their cyber security insurance plans. In short, one person can take one personal cyber insurance policy irrespective of the number of devices used.

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Susheel Agarwal