Tata AIG launches cyber insurance for companies

With businesses getting more susceptible to the growing risks, like data breaches, potential liability arising from a cyber-attack, liability arising from confidential information disclosure, business interruption due to a security failure and the costs to respond to a breach of sensitive information, Tata AIG General Insurance Company has designed the Cyber Risk Protector, the first ever comprehensive cover designed to protect the Cyber exposure risks of any company.

The solution which addresses the liability of companies arising from data protection laws, the management of personal data and the consequences of losing corporate information, provides a whole range of first party expenses along with defence and legal liability claims.

"Our Cyber Risk Protector policy is a new and innovative insurance solution that we have brought out for our clients. It covers them against both, first party as well as third party risks. In addition to indemnifying or compensating the insured for legal liability and notification costs, the policy provides cover for forensic services, credit monitoring services and reputation management. Cover is also available for multimedia liability, cyber extortion and network interruption," explained Sushant Sarin, senior VP, Commercial Lines, TATA AIG General Insurance.

Since the product targets all the segments including telecommunications, financial institution, healthcare providers, retailers, manufacturers, entertainment, to name a few, the company has set a regressive go-to-market strategy for the same.

"We are conducting seminars, workshops and round table discussions for clients, brokers and other distribution partners on cyber risks, recent instances of data breaches from around the world, typical consequences for clients who suffered such data breaches. We also highlight the ways in which cyber insurance helps mitigate these consequences. We are partnering with cyber experts, data security experts, and expert lawyers to cover different facets of the risk, the loss, and the remediation," said Sarin.

Talking about the market size of the service, Sarin explained, " Today, just about every business - from the smallest to the largest - uses computers, is connected to its customers, suppliers and other stakeholders electronically, and handles large amounts of business data - a lot of this data pertains to third parties. Therefore, risk and insurance managers across sectors are inquiring about insurance to cover their cyber risk exposure. Measured in these terms, the market size is immense. Measured in terms of premiums, our estimate is that, at the current stage, the cyber insurance market has a premium potential of $ 5-6 million and is growing. Globally, demand has been increased by 12% over last year and total premium paid for cyber insurance stands at $ 1.3 billion."

The policy premiums for a Rs. 5 crore limit range from Rs. 5-10 lacs for manufacturing industry, the education sector, and for consulting, accountancy and similar professional services. This can go up to Rs. 25 lacs for financial services, health care and telecom industry.