Cyber insurance claim: All you need to know

• Follow

The proliferation of smartphones, which has provided easy access to internet, mushrooming of e-commerce websites, smooth online payments have changed the way the world functions. Having said that there is always an element of risk involved in these online transactions. Statistics reveal that cyber risks have accelerated by as much as 500% since the first lockdown was imposed in India in March 2020. While the legal framework for cyber policy is still evolving, the Insurance Regulatory and Development Authority of India (Irdai) has charted out model guidelines for insurers to either launch a new product or widen the scope of their existing cyber insurance policy.

Cyber insurance is designed to cover the financial loss, fees, expenses and legal costs associated with cyber breaches due to hacking, email spoofing, skimming, cloning, among others. The policy is particularly beneficial for those who have high exposure to online transactions and are vulnerable to cyber frauds.

After buying the policy the next step is to keep yourself abreast with the claim filing process. The advanced gathering of knowledge can keep you calm and compose at the time of crisis. Here are some of the things you need to keep in mind at the time of filing a cyber insurance claim:

Cyber insurance claim procedure

On becoming the victim of the cybercrime, the policyholder shall first give notice in writing or through e-mail from registered email id to the insurer within 7 days but not later than 14 days after the end of the policy term or discovery, if applicable. The discovery period commences immediately after the expiry of the policy, during which written notice may be given to the insurer of a claim that has occurred prior to the expiry of the policy.

After intimating the insurer these documents need to be submitted for claim settlement, as per Irdai’s model guidelines:

a) Completed and signed claim form b) Copy of FIR or complaint lodged with police authorities or cyber cell c) Copies of legal notice received from any person or entity d) Copies of summons received from any court e) Correspondence copies with financial institutions relating to losses suffered f) Legal notice served on any financial institution g) Legal notice copy served on any third party for any data breach or privacy breach h) Criminal case copy filed against the third party i) Copies of invoices for expenses incurred j) Proof that the personal data belongs to the insured k) Proof of loss incurred

Insurer’s role

In case of a claim, the insurer is entitled to participate in the defence and at the negotiation stage of any settlement. However, the right and duty to defend and contest the claim shall lie solely on the insured. The insured also has to provide the company with all documentation and assistance that may be requested towards, investigation, defence, settlement or appeal of a claim.

In case of any dissatisfaction with the claim service, the insured can escalate the case with the Ombudsman in the respective area for resolving the issue.