Tata AIG plans cover for IT sector

Tata AIG plans cover for IT sector
ENS ECONOMIC BUREAU

MUMBAI, FEB 11: The Rs 125 crore Tata AIG General Insurance company is planning to launch the country’s first package of risk products for the domestic information technology (IT) sector.

Any company in the IT industry or with an e-interface can be provided cover for upto $25 million by four to five new products. The non-life joint venture between the Tatas and the American International Group, which is kickstarting its operation on March 5, is planning to start a major roadshow in six cities for its IT products on Monday.

“This is a one year product from AIG which has been tested successfully in other major markets including the US, the UK, Japan, Israel and Europe,” said Tata AIG’s managing director Dalip Verma.

Apart from Indian IT companies, any business with an e-interface will benefit from this cover, he added. AIG has already earned a total premium to the tune of $50 million within one year of the launch of these products. The company’s assistant vice president Uttara Vaid outlined four products which will be launched by the Tata AIG General Insurance company after being approved by the Insurance Regulatory Development Authority (Irda). Highlighting that IT risks can be insured, she said that corporates in the IT industry face brick-and-mortar risks endangering property, reputation, personnel, profits and growth. On the other hand, click-and-mortar risks include media content related liabilities, professional liability claims, loss/theft of intangible assets, e-business interruption losses, security breaches and extortion, all of which can be covered by the Tata-AIG IT risk package.

The IT risk policy can cover media content and related risk exposures concerning libel, slander, copyright infringement and right privacy violation, she added.A study by the Confederation of Indian Industry (CII) and Price WaterhouseCoopers (PwC) on the Indian industry has found out that an overall 72 per cent of the companies selling products or services on the Web reported at least one or more security breaches in the past year.

Over 50 per cent of the companies selling via the Web reported revenue losses as a result of security breaches as compared to 25 per cent of other companies. Although 95 per cent of the respondents use virus protection software, 49 per cent have faced a virus attack. Most breaches are discovered as a result of damage caused by the breach. Use of firewalls and intruder detection system was also found to be low.

AIG’s vice president and legal affairs officer Richard A Bessinger said that the company employs the services of around 20 underwriters and uses a quick claim settling mechanism to settle any claim out of such IT-risk related products.