5 Crucial Features To Not Miss While Buying Cyber Insurance
The current age is dominated by internet technology. You name it and there is an internet application linked to it. From homes to cars to even financial services. With the penetration of internet technology in everyday lives, there is a constant risk of threats. These threats are specifically known as cyber threats.
The cases of cyber frauds are on the rise and it has become crucial to protect yourself. Whether you are an individual with a digital footprint or an organisation that uses the internet predominantly for its business activities, cyber insurance policy is the need of the hour. Apart from the health, motor and life insurance policies, cyber insurance is as well as gaining traction. Now that you know the importance of a cyber insurance plan, let us look at five such crucial considerations when buying a cyber insurance policy.
#1 Identification of the risks
The first step when purchasing a cyber insurance policy is to understand the risks that you can face. For that, you need to know how sensitive the data is being exchanged over the internet. In some cases, the data may be generic and not something that the cyber attackers may be interested in, whereas, in case of banks and financial institutions, critical information is transmitted. Depending on the various risks that you may face, make sure to select a policy with adequate cyber insurance coverage.
#2 Understanding the scope of coverage
When buying a cyber policy, your next step should be understanding the coverage of the policy. It may so happen that a few events are excluded. For example, a particular event that is highly probable because of the data you handle.
#3 Ensure appropriate limits and sub-limits
The next essential thing to consider is the limit available under your policy. Different events have different limits set to them. Say, for example, a data breach that can be critical for your organisation should not be restricted in its coverage. Since the cost of responding to the data breach for your specific use case would be high, you should opt for a policy that provides maximum coverage. Further, many policies have sub-limits that can be a limiting factor when you make an insurance claim. These sub-limits can prove to be inadequate and you should reconsider your policy purchase at such times.
#4 Make a note of exclusions
Cyber insurance plans often have exclusions where a specified event is excluded from the policy cover. These exclusions are more or less similar but differ among insurance companies. Make a note of these specific exclusions plan wise and select a policy that checks all the right boxes.
#5 Premium and the deductible
Premium and deductibles go hand in hand for your policy. The deductible is that amount that you need to pay after which the insurance cover kicks in. Understanding the deductibles help in selecting an affordable cyber insurance policy. Some insurance plans have lower premiums than others but the deductible is high in such cases. Strike a balance between the current premium for your policy against the deductible you need to pay at the claim.
Ensure you read the policy document carefully and understand the fine print. It will help you make an informed decision while considering the requirements for your organisation.