Rising cyberthreats, contractual requirements as well as regulatory changes are making businesses opt for and renew cyberinsurance policies, an insurance web aggregator’s study findings showed.
Cyberinsurance is no longer perceived as an optional risk-transfer tool but a core component of enterprise risk management. Businesses have come to recognise the recurring and evolving nature of cyber risks. Nearly 100% of cyberinsurance clients are renewing policies, Policybazaar said on the study by its corporate insurance arm PBFB.
Companies with more than Rs. 10 crore turnover are leading the offtake, especially those in BFSI, IT and tech, healthcare and logistics industries besides startups. BFSI and tech sectors lead the list due to their high regulatory and operational risks, while start-ups are increasingly purchasing the cover to meet external requirements.
First-time buyers make up around one-third cyber insurance clients, a pointer to rising market penetration. Premium payout for liability insurance among businesses last fiscal was estimated to be Rs.3,500-Rs.4,000 crore. Of this, cyberinsurance accounted for approximately 20-30%, Policybazaar said.
“The cyberinsurance market has evolved from a niche offering to a business necessity in the last couple of years… with demand fuelled by increasing cyber threats and regulatory compliance. It’s poised for sustained growth, not just among large businesses but also among SMEs and emerging industries,” head of liability insurance at Policybazaar For Business Evaa Saiwal said.
Beyond financial recovery, cyberinsurance is becoming a key enabler of business continuity, ensuring companies can withstand and recover from attacks with minimal disruption. As threats like ransomware, phishing, and data breaches continue to escalate, integrating cyber risk management and insurance will be key to building a resilient and secure digital ecosystem for businesses, she said.
Without mentioning the claim amount, Policybazaar said business interruption from data breaches accounted to 45% of cyberinsurance claims, while social engineering attacks 25%; ransomware incidents 20%; and others 10% made up the rest. Typically financial losses and liabilities arising from cyber incidents, including data breaches, ransomware attacks, business interruption, and related costs like investigations, legal fees and public relations expenses, are covered under cyber insurance. There are two components to the cover — first-party that protects the insured business from direct losses and expenses incurred due to a cyber incident and third-party to protect against liabilities arising from claims made by others.
All four State-owned general insurance companies and around 13-14 private general insurers provide the cover forming part of the liability insurance.
Published – April 02, 2025 09:15 pm IST
