Cyber Insurance by HDFC ERGO

“In 2023, a global survey reported that the average cost of a data breach reached an all-time high of $4.45 million. With cyber incidents on the rise, securing your business against these threats is no longer an option but a necessity.”

The digital era has brought about incredible advancements and opportunities for businesses, but it has also introduced a significant array of cyber risks. From small startups to large corporations, every business that operates online or handles sensitive data is a potential target for cybercriminals. HDFC ERGO’s Cyber Insurance Policy is designed to safeguard commercial enterprises against a wide range of first and third-party liabilities stemming from cyber exposures associated with e-business, the internet, networks, and information assets.

Understanding Cyber Risks

The rise of digital platforms and technology means that companies now handle vast amounts of private and confidential information. As a result, they have a responsibility to keep this data secure. The risk of cyber threats is steadily increasing, with security and data breaches affecting millions of records annually. Reports of such breaches continue to rise dramatically, with the introduction of viruses and unauthorized access being well-known examples.

Real-Life Incident: The Target Data Breach

A notorious example of a cyber incident is the 2013 Target data breach, where hackers stole credit and debit card information from over 40 million customers. This breach cost Target an estimated $162 million and severely damaged its reputation. Such incidents highlight the urgent need for robust cyber insurance policies to mitigate financial fallout and ensure business continuity.

Coverage Offered by HDFC ERGO’s Cyber Insurance

HDFC ERGO’s Cyber Insurance Policy offers comprehensive coverage to protect businesses from a variety of cyber risks. Below are the key areas of coverage provided:

First-Party Coverage

1. E-Theft Loss: Protection against losses from fraudulent data input into a computer system, leading to unauthorized fund or property transfers.
2. E-Communication Loss: Covers losses from customer fund or property transfers due to fraudulent communication, for which the insured business is legally liable.
3. E-Threat Loss: Includes the cost of professional negotiators and payments made or property surrendered as extortion payments.
4. E-Vandalism Loss: Protection against losses caused by acts of vandalism, including those committed by employees.
5. E-Business Interruption: Coverage for extra expenses incurred due to business interruption caused by cyber incidents.
6. Privacy Notification Expenses: Covers the cost of credit monitoring services or similar services for affected customers, subject to a sub-limit.
7. Crisis Expenses: Includes the cost of public relations consultants to manage the crisis, subject to a sub-limit.

Third-Party Liability

1. Disclosure Liability: Coverage for customer claims resulting from system security failures that lead to unauthorized access or dissemination of private information on the Internet.
2. Content Liability: Protection against claims for intellectual property, trademark, and copyright infringement.
3. Reputational Liability: Covers claims alleging disparagement of products or services, libel, slander, defamation, and invasion of privacy.
4. Conduit Liability: Includes claims arising from system security failures that result in harm to third-party systems.
5. Impaired Access Liability: Coverage for claims due to system security failures that result in systems being unavailable to customers.
6. Defense Costs: Cover for costs incurred in defending any claim brought by a government agency, licensing, or regulatory organization. This includes advance defense costs for any cyber liability claim within 30 days of invoice receipt.

Exclusions

While HDFC ERGO’s Cyber Insurance Policy provides extensive coverage, certain scenarios are excluded:

1. Full Severability of Exclusions: Knowledge of one insured person is not imputed to another, and only the knowledge possessed by the Chief Executive Officer, Chief Financial Officer, or Chief Operating Officer of the organization will be imputed to the organization.
2. Prior Notice Exclusion: Excludes prior notice of a fact or circumstance that has been accepted by the previous insurer.
3. Fraudulent Acts: Excludes coverage for fraudulent acts or willful violations of any law or regulation by an insured.
4. Bodily Injury: Excludes bodily injury, sickness, disease, death of any person, or damage to any tangible property.
5. Mechanical Failures: Excludes coverage for mechanical failure, gradual deterioration, electric disturbances, media failure or breakdown, or any malfunction.

Key Benefits of HDFC ERGO’s Cyber Insurance

1. Combined Coverage: Offers the combined benefit of third-party (cyber liability) and first-party (cybercrime expense) coverage.
2. Broad Definitions: Provides broad definitions of “computer” and “system” to address enterprise-wide network exposure, including laptops, disk drives, backup tapes, and mobile devices.
3. No Employee Exclusion: There is no exclusion for fraudulent or malicious acts committed by employees.
4. Outsourced Data Coverage: Disclosure liability coverage extends to outsourced data processing and data storage services.
5. Privacy Notification Expenses: Coverage is triggered without a requirement for a claim or a regulatory mandate for notification.
6. Cyber Hacking and Attack Coverage: Provides coverage for incidents of cyber hacking and cyber attacks.

About HDFC ERGO General Insurance

HDFC ERGO General Insurance Company is a prominent name in the insurance sector, offering a wide range of insurance products and services. It is a joint venture between HDFC Ltd., India’s leading housing finance institution, and ERGO International AG, the primary insurance entity of Munich Re Group of Germany. HDFC ERGO’s portfolio includes health insurance, motor insurance, travel insurance, home insurance, and personal accident insurance, among others.

HDFC ERGO is committed to providing innovative and comprehensive insurance products focused on customer-centric solutions to meet diverse needs. The Cyber Insurance Policy is a testament to its dedication to protecting businesses in the digital age.

Conclusion

HDFC ERGO offers a Cyber Insurance Policy with comprehensive coverage, addressing first and third-party liabilities, and ensuring businesses are well-protected against various cyber risks. By choosing HDFC ERGO, businesses can safeguard their digital assets and maintain their reputation in the market.

For businesses looking for even more comprehensive coverage and expertise, consider partnering with Mitigata. With our advanced risk quantification tools and full-stack cyber support, we ensure that your business is protected from every angle.

FAQs

1. What types of businesses need cyber insurance? Any business that relies on digital operations or handles private and confidential information should consider cyber insurance. This includes e-commerce companies, financial institutions, healthcare providers, and more.
2. How does HDFC ERGO’s Cyber Insurance Policy handle data breaches? The policy covers privacy notification expenses, crisis management costs, and third-party liabilities arising from data breaches.
3. Does the policy cover losses due to employee actions? Yes, the policy covers e-vandalism losses caused by employees and does not exclude fraudulent or malicious acts by employees.
4. What is included in the defense costs coverage? The policy includes coverage for defense costs incurred in defending claims brought by government agencies, licensing, or regulatory organizations.
5. Can the policy cover cyber hacking incidents? Yes, the policy provides coverage for cyber hacking and cyber attack incidents.

Investing in HDFC ERGO’s Cyber Insurance Policy ensures your business is prepared to face financial and reputational challenges from cyber threats. For additional peace of mind and superior risk management, Mitigata is here to support your cyber resilience journey.