Quick Summary
Deepfakes and phishing are driving a record surge in cybercrime in India. Learn how cyber insurance works here, what it covers, and how to plug AI-driven gaps.
What’s happening with cyber fraud in India?
In 2024, India recorded over 2 million cyber fraud cases. That’s the highest on record, and AI is making scams harder to detect.
Why is AI such a big cyber risk?
AI isn’t just powering workplaces—it’s also powering cybercrime.
- Deepfakes: Fake video calls and audio messages trick employees into wiring money.
- Smarter phishing: Emails generated by AI look professional and genuine.
- Scalable attacks: Hackers can target hundreds of companies at once.
Example: In Hong Kong, an employee transferred $25 million after a deepfake video call with fake “company leaders.”
What does cyber insurance usually cover?
Most cyber insurance policies cover:
- Data breaches
- Ransomware and extortion
- Business interruption losses
- Legal expenses
But here’s the catch: AI-driven scams may not always be included.
Does cyber insurance cover AI scams?
Sometimes—but not always.
- Broad policies may cover deepfakes, phishing, and wire fraud.
- Narrow policies may exclude AI scams or cap payouts for social engineering fraud.
That’s why businesses need to read the fine print and confirm AI-specific coverage.
What do insurers look for before covering AI risks?
Insurers want to see proof that a company takes security seriously. This includes:
- Multi-factor authentication (MFA)
- Dual approval for financial transactions
- Employee awareness training
- A documented cyber response plan
The stronger your security posture, the better your coverage terms and pricing will be.
How can businesses buy the right cyber insurance?
- Ask directly about AI risks. Ensure that deepfakes, phishing, and AI-enabled fraud are specifically addressed in the policy.
- Check payout limits. Some policies cover fraud, but only up to a small amount.
- Use a broker. Brokers can negotiate policies tailored to your industry and AI risk profile.
Is cyber insurance enough for AI risks?
Not always. Businesses often need additional layers:
- Crime insurance for fraud and embezzlement
- Errors & Omissions (E&O) insurance if AI tools cause mistakes
- Directors & Officers (D&O) insurance if leadership faces claims of negligence
And insurance only works well when combined with prevention: stronger IT security, ongoing employee training, and backup systems.
Bottom line: Can cyber insurance protect against AI risks?
Yes—but only if you choose the right policy. Cyber insurance can shield businesses from the financial impact of AI-driven scams, but coverage depends on how the policy is written and how strong your internal defenses are.
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