IRDAI issues Guidance Document on product structure for Cyber Insurance

Sep 09, 2021 | by Avantis RegTech Legal Research Team

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Industry Specific Compliance

The Insurance Regulatory and Development Authority of India (IRDAI) on September 08, 2021 has issued guidance document on product structure for Cyber Insurance. After keeping in mind the rising incidences of cyber-attacks along with a growing number of high profile data breaches. The online exposures for individuals, business organizations, offices and other establishments continue to increase more so in the current pandemic situation.

IRDAI has constituted a working group with a focus to examine the possibility of bringing standardisation of Cyber Liability Insurance policy wording.

 The main objectives of the guidance document on product structure for Cyber Insurance are; 

• to enable insurers to evaluate new technologies posing heightened cyber risk, identify protection gaps in the existing products and address the changing needs of market.

• to facilitate insurers in developing stand-alone cyber insurance products, specifically designed to address the evolving cyber risks. 

• to provide a set of recommendations on maximum possible coverages that could be included in the cyber insurance products.

• to encourage insurers to adopt best practices and provide additional covers in response to customer needs. 

• to improve the development of the cyber insurance market with new products and enhance benefits for policyholders.

General insurers who have already developed some cyber insurance products with exclusive coverage for individuals to protect against cyber perils and currently offering the products that mainly focused on commercial business, may review the product structure based on the coverages advocated in the guidance document.

The above objectives should be implemented by insurers in a manner that is fair and useful to policyholders.

In addition to common reference framework contained in the document, it is equally important for insurers to consider the emerging insurable cyber perils and provide to customers a core insurance protection against cyber risks.

*Disclaimer – please find the Personal Cyber Insurance model policy wordings and Guidance Document on Common Reference Framework in the provided document.

[Circular No: IRDAI/NL/CIR/MISC/242/09/2021]

 


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