Janardhan NBuying cyber insurance? Smart move. But have you checked what it won’t cover?
Cyber insurance is one of the best investments your business can make today. With more companies adopting digitalisation, the risk of cyber threats grows exponentially.
If your business hasn’t faced any cyber attack yet, that doesn’t mean you’re safe. Instead, you might be on the hacker’s radar, waiting for the right time.
The stats tell the story:
- On average, every 39 seconds, a cyber attack happens.
- The BFSI sector (Banking, Financial Services, and Insurance) experiences double the global average number of attacks.
- India lost ₹22,845.73 crore to cyber fraud in 2024, which is a 206% rise from the previous year.
If you’re looking to buy cyber insurance, you’re already looking for a risk management plan for the unexpected. But here’s the catch: every policy has limits, and cyber insurance comes with a list of exclusions.
In this guide, we’ll walk you through the most common cyber insurance exclusions. This is to help you understand these gaps and choose a policy that truly fits your needs — without scaring you off from getting the right protection.
What Is a Cyber Insurance Exclusion?
A cyber insurance exclusion is simply something your policy won’t cover. It’s standard in most insurance policies, not a scam. Exclusions are there to manage risks and control costs. Think of them as the fine print that helps insurers avoid covering situations that are either too risky or outside the scope of the policy.
If you’re looking to buy cyber insurance. You should definitely understand why it’s getting popular in India.
But here’s the best part: with Mitigata, you don’t have to worry about navigating these exclusions alone. Because we are India’s leading cyber resilience company, offering solutions across cyber insurance, cybersecurity, and compliance.
Why Choose Mitigata?
- We bring the best competitive prices of the industry, keeping cyber insurance affordable for businesses of all sizes without compromising on coverage.
- We partner with India’s leading cyber insurance providers to match you with the right coverage as per your needs.
- We offer two kinds of insurance – cyber insurance for businesses and cyber insurance for individuals.
- Our claims process is fast and hassle-free, ensuring you get support when you actually need it the most.
Get Your Cyber Risk Backup Plan at Just ₹49,000
Common Cyber Insurance Exclusions
Here are a few standard cyber risk exclusions that you should keep in mind:
Malicious or Dishonest Activity:
If someone in your company is caught committing fraud, theft, or any illegal activity, the policy won’t cover the damages. For example, if an employee intentionally leaks data for personal gain, the insurance won’t cover the fallout.
Power Failures or Equipment Breakdowns:
If your business experiences damage caused by a hardware failure, software malfunction, or a power outage, cyber insurance won’t cover it. Suppose a server crash results in data loss, then you won’t be able to claim insurance for that.
Insolvency:
Cyber insurance won’t protect your business if it becomes bankrupt or insolvent. This exclusion means that if your company goes under financially, you won’t be able to claim for any cyber-related losses that happen after insolvency.
Prior and Pending Legal Claims
If your company was already involved in a legal dispute before you took out the insurance, that case won’t be covered. So, if there was an ongoing lawsuit regarding data breaches before your policy started, you won’t be able to claim for it under the insurance.
Personal Profit or Gain
If a director or executive in your company illegally profits from something like embezzlement or unauthorized financial gain, the insurance won’t cover any loss or claim that results. For example, if an executive takes personal advantage of confidential data, the company won’t be able to claim the loss under the policy.
Still confused about buying cyber insurance? Check out how cyber insurance benefits fast-growing companies.
How to Protect Against Excluded Risks
We’ve put together a simple guide on how you can protect your business against the cyber exclusions mentioned earlier.
Train Employees
A well-trained team can serve as your first line of defense. Mitigata provides employee training sessions on subjects such as phishing, anti-money laundering (AML), and more. These programs will assist your team in identifying risks early and acting appropriately, resulting in long-term benefits for the company.
Invest in Backup Systems
Always prioritize regular backups and cloud storage. So, you can avoid losing sensitive information due to power outages or device malfunctions. You can adopt the right cloud security solutions that keep your data safe and secure. In this manner, even if equipment breaks, you may recover with minimal disturbance.
Conduct Regular Audits
Regular financial and legal audits will protect your company in the long term by ensuring transparency and compliance. These audits will verify that everything is in order, and if an issue arises, you can address it early.
Review Contracts Carefully
Always make sure your policies are up to date and that any ongoing legal claims are disclosed before you sign. The coverage you choose today will decide how secure you’ll be tomorrow. Hence, always have a detailed discussion with your insurance provider before buying any policy.
Don't Wait Until a Breach Teaches You the Cost of Delay
Conclusion
Cyber insurance can be your safety guard when things take a wrong turn. But you should know what’s covered under the policy.
We hope we have helped you understand the cyber insurance exclusions, identify the gaps, and make an informed decision.
Looking for the right coverage without the hidden catches? Talk to us today.
akshit k