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With cyber threats surging in India, cybersecurity insurance is becoming crucial for individuals as well as businesses. Despite the country witnessing 369.01 million security incidents in a year, awareness about cyber insurance remains low due to perceived high costs. However, experts highlight that policies start…Read More
India experienced 369.01 million security incidents between October 2023 and September 2024, averaging 702 threats per minute or eleven new cyber threats every second somewhere in the country
In September 2024, Shruti (name changed) received three consecutive messages about transactions of Rs 20,000 each. She panicked, as she hadn’t made any such transactions. Immediately, she informed her colleagues, who advised her to stay calm and think clearly. Moments later, Shruti realized it might have been the Flipkart customer care representative who had accessed her mobile phone under the pretense of resolving her Samsung S23 order issue.
Shruti had become a victim of cybercrime. She was experiencing a delivery issue with her Samsung S23 from Flipkart, so one of her colleagues complained about the problem on the X platform (formerly Twitter). Shortly after, the colleague received a call from someone pretending to be Flipkart customer care, who then spoke to Shruti. She was asked to share her WhatsApp number and, while on the call, the scammer asked her to turn on a recorder that she didn’t realize was actually the “screen share” option.
She was instructed to follow certain steps to resolve the issue. To resolve the delivery issue, the scammer deceived Shruti into making a new order, warning that she would face problems with the delivery. When she made a new order by entering her PIN, the scammer saw it. After the call ended, she received the transaction messages.
The case of Shruti isn’t aloof. There has been an exponential increase in cyber scams across India, leading to significant losses in both monetary terms and critical data.
Exponential Surge In Cyber Scams In India
India experienced 369.01 million security incidents between October 2023 and September 2024, averaging 702 threats per minute or eleven new cyber threats every second somewhere in the country, according to a report titled India Cyber Threat Report 2025.
With the rise in cyber threats, the need for cybersecurity insurance has become more crucial to secure oneself in this domain as well. However, a lack of awareness and concerns about high costs discourage people from understanding the value of cybersecurity insurance in India.
Neha Anand, Vice President and Head of Cyber at Prudent Insurance Brokers, emphasizes that cyber risks have expanded beyond businesses to affect individuals across various aspects of their online presence, from shopping to learning.
“There has been a significant spike in cyber scams, and criminals are capitalizing on this trend. Individuals are being targeted, leading to financial losses and identity theft,” she said. Beyond monetary fraud, cyber threats also include stalking and cyberbullying, which disproportionately affect women. “People often post personal content online without realizing how it can be misused by fraudsters for blackmail and extortion,” Anand noted.
Personal cyber insurance typically covers both first-party and third-party liabilities, explained Kalpesh Chavan, Senior Vice President & Product Head of Elephant.in. “First-party coverage includes direct financial losses from fraudulent transactions, data recovery costs, business interruption expenses (for freelancers or small businesses), and credit monitoring services. Third-party coverage extends to legal liabilities arising from data breaches, online defamation, intellectual property rights violations, and lawsuits,” he added.
Is Cyber Insurance Affordable?Â
India, being a price-sensitive market, has witnessed slow adoption of insurance in general. Cyber insurance is no exception. However, Anand pointed out that cyber insurance is relatively affordable, with basic coverage starting at just a few hundred rupees. “It can be as low as Rs 200, roughly the price of a cup of coffee, and can go up to Rs 20,000 for comprehensive coverage,” she explained. On average, a good policy costs between Rs 1,000 and Rs 2,000.
Cyber insurance covers various digital threats, including cyberbullying, cyberstalking, extortion, identity theft, and unauthorized bank transactions. Additionally, modern policies also extend coverage to smart home devices that may be hacked.
Coverage For AI-Driven Threats
With emerging threats like deepfake scams, there is growing concern about whether cyber insurance policies provide coverage for such risks. Anand noted that while deepfake-related frauds have not yet become widespread in financial crimes, insurers are gradually expanding their policies to cover these evolving risks.
“Currently, most policies extend coverage for unauthorized access, phishing, and financial fraud. However, deepfake threats and digital impersonation still need explicit inclusion in most policies,” she added.
What Is Claim Process And Challenge
Kalpesh Chavan explained that filing a claim under personal cyber insurance involves a structured process.
Below are certain steps which one should follow:
Incident Reporting: The policyholder must notify the insurer promptly after detecting a cyberattack or fraudulent activity.
Documentation Submission: Supporting evidence such as forensic reports, bank statements showing unauthorized transactions, and proof of financial losses must be provided.
Investigation & Verification: Insurers conduct investigations, often involving cybersecurity experts, to assess the legitimacy and scope of the claim.
Approval & Payout: If the claim is validated, the insurer compensates the policyholder based on the coverage limits and policy terms.
“To improve claim success rates, individuals should maintain detailed records of suspicious activities, invest in cybersecurity tools, and thoroughly review policy terms to understand coverage limitations,” suggested Chavan.
The claim process for cyber insurance is designed to provide swift assistance. Policyholders are given a dedicated helpline for immediate support. “Assistance includes help with filing an FIR, blocking compromised bank accounts, and guiding victims through the recovery process,” Anand explained. The system is structured to help victims manage the situation efficiently and minimize financial or emotional distress.
Factors Influencing Cyber Insurance Premiums
Cyber insurance premiums depend on several factors, including the extent of coverage, policy limits, and whether family members are included. Anand stated that a single policy could cover multiple family members regardless of the number of bank accounts or devices.
“The underwriting process relies on data analysis of financial losses, fraud trends, and the extent of policy benefits,” she said, adding that insurers continuously assess evolving cyber risks to refine their pricing and coverage.
The Need for Awareness
Despite the availability of cyber insurance, public awareness remains low. Anand stressed the importance of educating individuals about cyber risks and insurance solutions. “People need to realize that cyber insurance is not just for corporations but also essential for individuals in today’s digital era,” she concluded.
As cyber threats continue to evolve, the need for cyber insurance is becoming increasingly critical. While affordability is not a major barrier, a stronger push for awareness and education is necessary to drive adoption among individuals.