By Janardhan N 
What is Cyber Insurance and What to Know about it.
These days, it’s not about if a cyberattack will happen — it’s when.
In 2025, cybercrime losses in India are projected to hit $200 billion.
As per the cybercrime statistics, the cost of data breaches has been climbing for years. In 2024 alone, the average breach cost businesses around $4.88 million — about 10% more than the year before.
From banks and hospitals to schools and shopping sites, almost everything we rely on is now online. And with that, the risk of being hacked is higher than ever.
Firewalls and antivirus tools can help, but they’re not always enough. If something goes wrong — if data is stolen, systems go down, or customers are affected — you’ll need support that goes beyond basic protection. That’s where cyber insurance comes in.
What is Cyber Insurance?
Cyber insurance — sometimes called cyber liability or cyber security insurance — helps cover the money you might lose after a hack or data breach.
Think of it like this: car insurance helps after an accident, and property insurance steps in if your office gets damaged or robbed. In the same way, cyber insurance helps when things go wrong online — like if your data gets stolen, you’re hit with ransomware, or your systems get hacked.
Importance of Cyber Insurance in India
Cyber Security Insurance is gaining importance in India as online scams and data breaches become more frequent. This growth is backed by numbers – India’s cyber insurance market will grow rapidly, from $582.2 million in 2024 to $6,907.8 million by 2033.
What’s causing this growth?
One major factor is the rising awareness among individuals and businesses about the need to manage digital risks. People are beginning to realize that cyber dangers are not just a problem for big businesses anymore, as more and more of our everyday activities are done online.
Types of Cyber Insurance Coverage
Cyber Security Insurance is designed to protect businesses from a range of online threats and their resulting financial losses. In general, there are two primary types of coverage: third-party and first-party.
- First-Party Coverage
This type of coverage helps your business deal with the direct impact of a cyberattack. It can cover things like ransom payments, downtime losses, the cost to recover lost data, and the expense of telling your customers about the breach.
- Third-Party or Cyber Liability Coverage
This kicks in when someone else — like a customer, client, or even a regulator — holds your business responsible for a cyber incident. It helps cover legal fees, settlements, and fines if you’re found to have broken data protection laws.
What is covered in a Cyber Insurance Policy
So, while now you know what a cyber insurance policy is, you must also understand what it actually covers — because that’s where the real value comes in.
A cyber insurance policy doesn’t prevent a cyberattack from happening, but it helps you manage everything that comes after — especially the financial, legal, and operational mess a cyber incident can leave behind.
Here’s what a cyber policy usually helps with:
- Data Breach Costs – Covers the cost of figuring out what went wrong, telling affected customers, and even offering them credit monitoring after a breach.
- Business Interruption Losses – If a cyberattack forces you to pause operations, this helps recover lost income during that downtime.
- Cyber Extortion – Helps if you’re hit with ransomware or blackmail — including ransom payments and expert help to handle the situation.
- Data Restoration – Covers the cost of fixing or recovering data that was lost or damaged because of malware or hacking.
- Regulatory Penalties – If the attack causes you to break any data protection laws, this can help pay for the fines or penalties.
- Legal Representation Costs – Pays for lawyer fees and court costs if someone takes legal action against you after a cyber incident.
- Identity Theft – Covers the costs if personal data is stolen and used for identity theft after a breach.
- Notification Costs – Helps with the expense of informing people whose information was exposed.
- Reputation Management Costs – Covers PR and communication support to help protect your brand and rebuild trust after an incident.
What is not covered in a Cyber Insurance Policy
Although Cyber security Insurance Policy offers protection against a range of online scams, it’s important to understand what it doesn’t cover.
There are different types of insurance plans — like cyber insurance, directors & officers’ liability insurance, crime insurance, and commercial general liability (CGL). Each of these has its own rules and exclusions, but some things are commonly not covered across most policies.
Here are a few of them:
- Malicious or Dishonest Activity – If you or anyone in your company is caught doing something illegal—fraud, theft, shady schemes—the policy won’t pay for those losses.
- Power Failures or Equipment Breakdowns – Damage caused by hardware issues, media errors, or power cuts isn’t included.
- Insolvency – If your business goes bankrupt or becomes insolvent, cyber insurance won’t help recover those losses.
- Prior and Pending Legal Claims – Any lawsuit or legal action that started before your policy began won’t be covered. Old claims are off the table.
- Personal Profit or Gain – If a director or executive makes money they’re not legally entitled to, any loss or legal claim stemming from that won’t be covered.
Why Every Business Needs Cyber Liability Insurance in 2025
Today, no business is too small—or too big—to be targeted by cybercriminals. Whether you run a startup, an online store, or a well-established company, the risk possibilities are everywhere.
And in 2025, as cyberattacks become more frequent in India and worldwide, having Cyber Security Insurance has become a necessity.
So, who actually needs Cyber Policy?
- Businesses that keep client data or other sensitive information online or on computers.
- Companies with a broad customer base, where a single data breach could impact thousands.
- Organizations with high income or valuable digital assets are prime targets for hackers.
All of this can drastically harm a company’s reputation in addition to costing money. However, this may be avoided with Cyber Policy, which helps pay for these unforeseen costs, allowing your company to recover more quickly without suffering significant losses.
If you’re looking to protect your business from such risks, Mitigata is here to help. We offer comprehensive Cyber Insurance and cybersecurity services tailored to your business needs— because staying safe in the digital age starts with being prepared.
Conclusion
By now, you must have a clear understanding of what cyber insurance is and why you need it, especially with the rising number of cyber threats across India.
The next step is finding the right partner to help you stay protected.
That’s where Mitigata comes in.
We offer more than just cyber security insurance — we provide end-to-end cyber resilience. From identifying your digital risks to building strong defenses and backing you with the right insurance coverage, our team helps you stay ready for whatever the threat landscape throws your way.
Frequently Asked Questions (FAQs):
Q1. What is cyber insurance and how does it work?
Cyber insurance is a type of policy that helps cover the financial losses caused by cyber incidents like data breaches, ransomware attacks, and hacking. It works by reimbursing costs related to recovery, legal support, notifications and more, depending on your coverage.
Q2. Does my small business really need cyber insurance?
Yes. Small businesses are often easier targets for cybercriminals due to limited security resources. If your business handles customer data, uses online tools, or relies on digital systems, cyber insurance is essential.
Q3. What does a cyber insurance policy generally cover?
Most cyber insurance policies cover things like data recovery, business interruption, legal fees, notification costs, ransomware payments, and reputation management. However, coverage varies by provider, so it’s important to review your policy carefully.
Q4. What is not covered under cyber insurance?
Common exclusions include prior known incidents, insider fraud, personal profit, and criminal activity involving your own team. Some policies may also exclude nation-state attacks or outdated systems.
Varsha Nair