Do you know that Cyber Security risk can be covered under a Tech E&O policy?

Nowadays, almost all clients require cyber security insurance as part of their contractual requirements with Indian businesses. However, taking a stand-alone cyber policy in India is becoming increasingly difficult and costly due to the recent surge in cyber-attacks. Stricter underwriting guidelines from reinsurers also require Indian companies to be more proactive in implementing cyber security standards, and they expect the entire liability portfolio to be placed with them.

On the other hand, MNCs that outsource projects to Indian SMEs are particular about having a Cyber Security policy in place, as per their agreement. Therefore, it might be beneficial to have a two-in-one policy by opting for Tech Errors & Omissions (Professional Indemnity), which also covers third-party cyber liability through the “Unauthorised Access Clause”. Note that this clause is not part of the standard policy wording and needs to be specifically requested while purchasing the policy.

This clause safeguards the insured from third-party cyber liabilities, which would suffice for contractual requirements and protect the vendor’s interests in case of a breach.

In conclusion:

If your business needs comprehensive cyber risk coverage for both first-party and third-party liabilities, consider a standalone cyber insurance policy, as it covers all risks related to data breaches, fund transfer losses, etc. It’s always better to have full coverage instead of just meeting contractual requirements.