The Insurance Regulatory & Development Authority of India (IRDAI) vide circular dated September 8, 2021, has released a Guidance Document to enable product structure for Cyber Insurance.
As individuals and entities are increasingly exposed to Cyber-attacks and risks, especially during the COVID-19 pandemic, the IRDAI had earlier constituted a working group to examine the possibility of standardization of Cyber Liability Insurance policy wording, which they concluded was not desirable, at the moment, due to several factors.
However, the working group still opined that the general insurers should be guided by model policy wordings which then resulted in a Guidance Document for Cyber Insurance Policy Product. The Guidance Document also contains Model Policy Wordings for Personal Cyber Insurance and a Common Reference Framework. The Guidance Document defines ‘Cyber Insurance’ as an insurance policy designed to protect the policyholders against cybercrimes.
A few objectives of the Guidance Document is to enable insurers to evaluate new technologies posing a heightened cyber risk, facilitate insurers in developing stand-alone cyber insurance products, address evolving cyber risks, develop new products and enhance benefits for policyholders, and encourage insurers to adopt best practices.
The complete guidance document can be accessed here
September 8, 2021