After conceptualising Standard Health and Life insurance covers, the Insurance Regulatory and Development Authority of India (IRDAI) is keen on evolving a basic Standard Cyber Liability Insurance product.
As a step towards such a product, a Working Group has been constituted by the regulator. The nine-member group, with Consultant-Liability Insurance P. Umesh as chairman, has been tasked to explore possibility of developing standard coverages, exclusions and optional extensions for various categories.
In doing so, the Group has been advised to study various statutory provisions on information and cyber security; evaluate critical issues involving legal aspects of transactions in cyber space; and to examine various types of incidents involving cyber security in recent past and possible insurance coverage strategies for them.
The terms of reference of the working group, which is required to submit its report within two months, include examining the cyber liability insurance covers available in the country and abroad and recommend scope of such covers for the present context and the medium term too.
An order constituting the working group said amid the COVID-19 pandemic, there have been rising incidences of cyber attacks and a growing number of high-profile data breaches. It is felt that cybersecurity is the most important need for all sectors today to address the numerous risks posed by cyber-attacks, the regulator said.
Stating that insurance products need to adapt to the changing environment, the IRDAI communication said the General Liability policies do not cover cyber risks. Cyber insurance policies currently available were highly customised for clients in a new and quickly growing market. Thus, it was felt that a basic standard product structure is required to provide insurance cover for individuals and establishments to manage their cyber risks.
The members of the working group include have been drawn from public and private sector insurers, reinsurers, National Insurance Academy and IRDAI officials.
