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The article is showcasing about the IRDAI new reform over Cyber Liability Insurance. The cyber liability insurance is a new kind of insurance, which has been in demand since, the growing space of cyber activities. We see everything or the world is rotating in the internet. The internet or cyber activities comprises of the world- activities from social media, selling or buying online, entertainment, web searching or publication, reading or virtual classes, we name it and it has begun in the cyber space. The drawback is that, the regime and its legislation and insurance coverage was never complied. The compliance and strength to the legislation has come in the given time. The Information Technology Act, 2000 has been in the command ever since and now, the introduction of cyber liability insurance. The Cyber security consulting services has been discussed in this article.
Order of IRDAI-Reference Number-IRDAI/NL/ORD/MISC/260/10/2020
The Order states that in the days of Pandemic of Covid-19, there were rising cases of the cyber attacks and high profile data breaches. It was considered that the cyber security has become the important need for all the sectors of the society, in order to address the numerous risk posed by the cyber attacks.
The notification clarifies over the increased online exposure of business , offices, organisations, other forms of enterprises, establishments, faces the associated risk, as they become more globally attached, and complex insurance products need to adapt to the changing environment.
It has been surveyed and realised that General Liability Insurance is not prone or give coverage to cyber attacks or cyber liabilities. It has been discovered that cyber liability insurance coverage if available, it is on high customisation to clients.
Cyber liability insurance has a growing market. It requires the basic standard product structure, to provide insurance cover for individuals, and establishments to manage their cyber attacks.
The working group has been formed for the purposes to evaluate the following, in order to launch insurance products for cyber liability insurance:
The cyber liability insurance is the new custom made insurance and the advance weapon to fight the war against the data security issues. The insurance is a comprehensive cover for third party liability and first party expenses a bank may incur arising out of unauthorised access or use of electronic data or software. The cyber gives coverage for the liabilities, cost, and expenses arising from network outages, the spreading of a virus or malicious code, computer theft or extortion.
There are multitudes of benefits arising from the cyber liability insurance. The insurance is designed in such a way that addresses many variables within the online realm, it includes:
The policy is the comprehensive cover for the first party costs, and third party liability risk, arising from cyber event. Here the policy provides the protection to the bank in the following ways:
What is first party and third party coverage?
The first party cover means that, which provides protection in the event of loss whether caused by it or someone else, which is financial assistance, in order to reduce the impact of data breaches, and cyber attacks. It may include:
Third Party Liability Coverage- Cyber Liability Insurance
The third party coverage under the cyber liability insurance is provides a protection against the third party. Where there is a cyber attack or data breach and it covers the people or business responsible for it. This includes:
There are various exclusions from the cyber liability insurance coverage, which includes:
The following contains the guidelines issued by the IRDAI for the cyber liability insurance:
It can be concluded that the working group established by the IRDAI, and the issues raised have been guided in the new Cyber Liability Insurance. The aim is to protect and prevent data theft in this digital age.