Cyber Insurance in Nepal

Cyber Insurance in Nepal
  • 10th Jun 2021
  • Onecover

Generally, the term Insurance is a contract, represented by a policy in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools client’s risk making payments more affordable for the insured.

Insurance is a legal agreement between two parties i.e. the insurance company and this, the insurance company promises to make good the losses of the insured on happening of the insured accidents. An accident is an event that causes a can be the death of the policyholder or damage of the property. It’s called an accident because there’s uncertainty regarding the happening of the event.

Objective of insurance

1.   Granting security to people

2.   Minimization of losses

3.   Diversifying the risk

4.   Reduces the anxiety and fear

5.   Generation capital

Types of insurances

1. Life insurance

2. Health insurance

3. Car insurance

4. Education insurance

5. Home insurance, etc.

Cyber insurance

Every business requires a special type of insurance, policies that insure against a specific type of harm or risk faced by a particular business. There are several types of insurance, among all cyber insurance is one of them. Cyber insurance basically covers your business ‘liability for a data breach involving sensitive customer information, such as social security number credit card number account number driver’s license number, and health record.

Cyber insurance help in notifying the customer about a data breach, restoring the personal identities of the affected customer. Similarly, cyber insurance recovers compromised data as well as repairs damaged computer systems.

Moreover, cyber insurance is also known as cyber liability insurance or policy that helps protect organizations from fallout from cyber-attacks and hacking threats. Having a cyber-insurance policy can help minimize business disruption during the cyber incidents and their aftermath. Meanwhile it also potentially cover the financial cost of some element of dealing with the attack and recovering from it.

Important of cyber insurance

Cyber-insurance is a risk management technique by which network user risks are transferred to an insurance company, in return for a fee, i.e., the insurance premium. Examples of potential cyber-insurers might include ISP, the cloud provider, traditional insurance organizations. Promoters of cyber-insurance believe that cyber-insurance would lead to the design of insurance contracts that would shift appropriate amounts of self-defense liability to the clients, thereby making cyberspace more powerful. Here the term ‘self-defense' implies the efforts by a network user to secure their system through technical solutions such as anti-virus and anti-spam software, firewalls, using secure operating systems, etc.


Hence, Cyber insurance is a form of insurance for businesses and individuals against internet-based risks. The most common risk that is insured against is data breaches. Cyber insurance typically includes losses from network security breaches, theft of intellectual property, and loss of privacy.