Globally, as well as in the domestic market, more and more people have adopted digital technology in recent years. People and businesses are increasingly using online platforms for work and other activities.

Any evolution inevitably brings with it a set of challenges, and in this digital age, we are confronted with various cyber threats such as data breaches and online fraud. All these issues bring us to the importance of cyber insurance and why one should have it to avoid the increasing number of cyber threats.

As any digital frauds or attacks get more sophisticated, everyone, including the small individual and large corporate, face the risk of financial loss or reputational damage. Imagine someone hacking your social media account and creating mayhem in your life.

Like any other insurance, cyber insurance provides coverage for the various cyber threats and gives much-needed protection in the fast-paced digital world.

It's not like frauds and cyberattacks have started recently in India; this was prevalent in the past and will even continue to thrive going forward—thanks to the more advanced technology used by the fraudsters. In the last year alone, fraudsters in Kolkata robbed residents of a staggering Rs 100 crore. The frauds took place through a fake ticket booking scheme, intimidation tactics, and phishing scams.

Similarly, cyber fraud in Indore claimed a staggering Rs 60 crore, impacting even the city's highly educated professionals. According to the Indian Cyber Crime Coordination Centre (I4C), a division of the Ministry of Home Affairs, India experienced losses of approximately Rs 11,333 crore due to cyber fraud during the first nine months of 2024 alone, as suggested by various media reports.

So if one wants to understand cyber insurance in India, then there are two broad categories of insurance. One of the individual cybersecurity insurances, which primarily helps online users and covers various risks like cyberstalking, identity theft, and social media liabilities. These policies also provide protection against malware attacks, phishing scams, and email spoofing.

The other type of insurance is specifically designed for corporates or companies, known as cyber liability insurance. This insurance helps them protect against the financial impact of data breaches, ransomware attacks, and other cyber incidents that could disrupt their business operations.

India, as a developing economy, will need to adopt digital technologies. Individual investors and organizations alike will continue to rely heavily on cyber insurance as a risk management tool. Cyber dangers formerly considered a distant concern, are now an immediate reality.

Without sufficient insurance, individuals and businesses are exposed to the financial and reputational consequences of these disasters. One of the primary benefits of cyber insurance is that it provides a safeguard against the growing number of cyber dangers. When bought by companies and individuals, it helps preserve important assets and contributes to a more secure digital ecosystem, hence promoting the growth of India's developing digital economy.

(The article is written by Rakesh Goyal, Director, Probus)