HDFC ERGO “Cyber Security” Specialty Insurance: A review

The Cyber Insurance policies covered so far, by the previous blogs, only provided a cover to the Individuals and their families or served to a Retail Market. These Policies were not designed for corporations and organisations, as the requirements by this kind of market are naturally very different from the Retail Market. There is also a huge difference in the Financial Value of Liabilities which could potentially arise after a Cyber Incident. To cater to this market, HDFC ERGO provides with a “Specialty Insurance” i.e. The Cyber Security Insurance. This Blog will take one through the Key Highlights of the policy and will also highlight the difference from the Retail Policies. 

Instances covered by the policy: 

1. E-Theft Loss

2. E-Communication Loss

3. E-Threat/E-Extortion

4. E- Vandalism

5. E-Business Interruption

6. Privacy Notification Expenses

Expenses and Liabilities covered by the Policy: 

1. It covers all the direct consequences or costs incurred after the occurrence of an any Cyber Incident Mentioned in the List.

2. It also covers the instances of consequences where the Employee of the company is responsible for the Cyber Incident which led to these consequences.

3. The policy also covers the costs incurred to mitigate with any crisis arising of any incident. This also includes the costs of paying Public Relations Organisations.

4. The policy also provides a cover for the direct consequences incurred by the Third Parties due to a cyber incident, where the organization was the victim of such an incident.

5. It also covers the costs incurred to defend a case bought in by the government after a cyber incident, where the organization was the victim of such incident.

6. The disclosure liability/expenses also covers the incidents at outsourced data processing and storage services. 

Limitations of the policy: 

1. The policy doesn’t cover any expenses to fix or replace devices with mechanical failures, any gradual degradation or physical damage.

2. Any prior notice to the organization relating to the incident will also lead to the exclusion from the policy.

3. Fraudulent or willful violation of any law of the land also leads to an exclusion from the policy.

This corporate Cyber insurance provides a very unique advantage in terms of their product offering. It is providing with criminal based liabilities and as well as the civil based liabilities, which is different from the usual policy offerings relating to cyber insurance. The features provided by the policy are very similar to retail insurance, excluding the corporate nature of the policy and the high premiums which one will need to pay, depending on the size of the organization. However, the costs for pursuing a case, against the alleged offender or to defend a civil suit bought by an individual, are not provided by the policy.