Bajaj Allianz’s Cyber Safe plan won’t cover any personal opinions, images or videos shared on social or other digital media platforms. (Photographer: Chris Ratcliffe/Bloomberg)

Now, An Insurance Cover For Victims Of Online Abuse, Data Theft

India now has its first insurance cover against cyberattacks and online abuse for individuals as internet usage grows and the government pushes to link everything from bank accounts to mobile phones with the Aadhaar biometric ID.

Bajaj Allianz General Insurance Company Ltd.’s cyber liability insurance provides cover against online and social media attacks, data breaches, identity theft, and extortion and bullying, a company statement said. A buyer should be of 18 years or more and must own a digital device like a mobile phone with access to the internet. It won’t cover personal opinion, images or videos shared by a user on social or other digital media platforms.

The Cyber Safe plan will insure buyers for Rs 1 lakh to Rs 1 crore, covering legal and counselling costs, travel bills for appearing in court, compensation for a loss from data theft and data restoration refunds. The company, which has received regulatory approval, is yet to decide on other details. The premium starts from Rs 657 to Rs 8,000 plus depending on the age, internet usage and risk profile of the customer, Tapan Singhel, managing director and chief executive officer of Bajaj Allianz told BloombergQuint.

India is adding over two new internet users every second, driven by falling prices of smartphones, higher adoption of mobile devices, and the availability of telecom infrastructure that supports 3G/4G speeds, a Morgan Stanley report said. It estimates that the number of Indians with internet access will more than double to 900 million in a decade. Already, the country is the biggest market for social media giants like Facebook and WhatsApp, making users prone to data theft, abuse and trolling.

The Biggest Hurdle: Frivolous Claims

The stumbling block is low awareness in India. Insurance penetration in the country at 3.4 percent is about half the global average. And there’s a high possibility of frivolous claims.

“This policy may suffer the same fate as the motor third-party insurance in India, where the claims remain pending for years as they are under litigation,” said Ashvin Parekh, insurance expert at Ashvin Parekh Advisory Services. There has to be an independent mechanism to assess loss and quantify compensation for cases of defamation, while bullying is more of a legal matter, he said.

Other challenges would be dealing with fraudulent claims, untraceable cyber hackers and fake news, he said. The pricing of the product will also be crucial as the volume of claims will be high. Claims will pile up if they get stuck in the court,” he said.

Singhel said there is a pattern to such claims and the insurer will depend on its in-house analytical tools and expert systems to check that. “As time progresses, the companies get better at this, and this also will evolve,” he said.

Globally, similar policies are offered by the U.S.-based American International Group, Inc and Hartford Steam Boiler Inspection and Insurance Company and Britain’s Hiscox.

“The amount of personal data being generated, transmitted, and stored on various digital devices is growing at an exponential rate,” said Tapan Singhel, managing director and chief executive officer. As cyberattacks and threats become more complex and prevalent, the company identified a need for cyber-insurance for individuals, he said.

(Updates an earlier version published on November 2, 2017 to add comments from the company in paras three, eight and nine)