Companies will be in a rush to buy cyber insurance once the draft becomes a law
India is likely to see a 30 percent growth in cyber insurance policy sales, after the implementation of the Personal Data Protection Bill. A report by Global Insurance Brokers said the number of policies has seen a cumulative growth of 25 percent over the past four years
The long-awaited data protection recommendations of the Justice Srikrishna Committee were out as a draft bill in July 2018. The draft looked at the right to privacy and sensitive personal data of Indian citizens, as also how personal and sensitive data is being processed by different entities.
The strict obligations of the proposed bill will lead to the data liability cover being put to test, according to the report.
It said the compulsory notification to the regulators instituted under the bill, the privacy notice and authority assessment obligations will require entities to re-assess their cyber risk standing as well as tweak their cyber insurance.
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Even before the arrival of the Personal Data Protection Bill 2018, the market saw an upswing in the number of cyber protect insurance policies placed. The bill is expected to further strengthen the number of cyber policy seekers and increase the average amount sought as the policy limit by the companies.
Manoj Kumar AS, Senior Vice President, Liability Head and Mumbai branch head at Global Insurance Brokers says, “While the bill will take the natural course of time in terms of developing into an Act, the present iteration of the bill largely showcases the intent and powers of the government with respect to privacy in India and to put stiff obligations on Indian entities. The enactment of the bill would lead to a major impact on the existing cyber insurance ecosystem across the country."
The Ministry of Information and Technology through the Srikrishna Committee, recently released the Personal Data protection Bill of 2018.
The bill has come at the time of major international events like recent breach by a British consultancy firm, the WannaCry and Petya attacks as well as a few online banking frauds and data theft incidents.