Cyber Insurance: India's New Digital Shield?

Indian companies are increasingly turning to cyber insurance to mitigate risks such as data breaches, ransomware attacks, and extortion attempts. These incidents have become more prevalent, prompting businesses to integrate cyber coverage into their operational planning.

Before issuing policies, insurers typically mandate that businesses implement adequate cybersecurity measures. These often include robust access controls, data protection strategies, and well-defined incident-response protocols. Policies can provide financial support for forensic investigations, legal counsel, and system restoration.

However, challenges persist, particularly for small and medium enterprises (SMEs) who are often underinsured or lack awareness of available policies. Experts caution that policy scope and exclusions can leave businesses exposed, with some policies omitting coverage for ransom payments, a common threat.

While cyber insurance aids in financial recovery, it is not a substitute for proactive cybersecurity. Basic safeguards like multi-factor authentication and secure backups are essential. Preparedness, including tested response plans, is crucial for minimizing disruption and reducing losses. Regular review of systems, security tools, and policies is also vital to ensure coverage aligns with evolving cyber threats.