The Ministry of Industry and Information Technology in China recently announced the initiation of pilot work on cyber security insurance services. The General Office of the Ministry released the “Notice on Organizing and Carrying out Pilot Work on Cyber Security Insurance Services” on December 21, outlining the plans for the pilot program.
The “Notice” specified that the pilot insurance types will mainly include cybersecurity property insurance and cybersecurity liability insurance. Cybersecurity property insurance aims to protect first-party direct losses caused by cyber security incidents and the resulting technical service costs. This includes covering direct physical losses, business interruption losses, data asset replacement costs, hardware improvement costs, emergency response costs, public relations expenses, and legal expenses resulting from network security incidents.
On the other hand, cybersecurity liability insurance is designed to protect liability for compensation to third-party individuals or institutions caused by cyber security incidents. This includes coverage for data leakage liability, cyber security incident liability, media infringement liability, outsourcer-related liability, product liability, and professional responsibility related to technical services.
The initiative is a significant step towards bolstering cyber security and protecting businesses and individuals from the financial impact of cyber security breaches. The pilot program is expected to lay the foundation for a more comprehensive cybersecurity insurance framework in the country.
The announcement has been welcomed by industry experts and stakeholders as a positive development in the realm of cyber security. It is seen as a proactive measure to mitigate the growing cyber threats and their potential financial ramifications.
The move comes as cyber security concerns continue to be at the forefront of global discussions, with the threat landscape constantly evolving and posing new challenges for businesses, governments, and individuals. The implementation of cybersecurity insurance services is seen as a proactive and strategic approach to addressing these challenges.
The “Notice” indicates that the pilot program will prioritize cybersecurity property insurance and cybersecurity liability insurance but leaves room for potential expansion and diversification of insurance types in the future.
With the increasing frequency and sophistication of cyber attacks, the need for cybersecurity insurance has become more pressing. The pilot program is expected to provide valuable insights and data to further refine cybersecurity insurance services and ensure comprehensive protection for businesses and individuals in the digital age.
(Editor: Wen Jing)