Soon, there could be a basic standard product cover for individuals and establishments against cyber risks.
The Insurance Regulatory and Development Authority of India (IRDAI) has formed a working group to examine the need for standard cyber liability insurance products, chaired by P Umesh, Consultant-Liability Insurance.
Observing that cyber attacks are on the rise with a number of high-profile data breaches amid the Covid-19 pandemic, the regulator said cyber security is the “most important need” for all sectors today to address the numerous risks posed by cyber attacks.
The general liability policies do not cover cyber risks, and cyber cover products currently available are highly customised for clients.
“Hence, it is felt that a basic standard product structure is required to provide insurance cover for individuals and establishments to manage cyber risks,” IRDAI said in a circular
The panel will study various statutory provisions on information and cyber security to evaluate critical issues involving the legal aspects of transactions in cyberspace.
It will also examine the various types of incidents involving cybersecurity in the recent past and possible insurance coverage strategies for those, and the cyber liability insurance covers available in the Indian market and in other developed jurisdictions.
It will recommend the scope of cyber liability insurance covers for the present context and for the medium term, and explore the possibility of developing standard coverages, exclusions and optional extensions for various categories.
The working group has to submit its report within two months.