Insurers line up to give e-comm firms customised cover

Insurance companies and brokers are seeing a big business opportunity in the booming e-commerce space. Besides offering traditional corporate policies, such as property and transit insurance, they are now coming up with customised insurance packages for e-commerce firms to cover risks, such as data theft, online frauds and hacking of websites.

“Start-ups typically take a lot of risk, and insurance is essentially about mitigating risk. So, though insurance may look like an unnecessary expense, most big e-commerce firms are now realising the importance of covering their risks through insurance,” said Birendra Mohanty, Vice-President, ICICI Lombard.

The CEO of a leading insurance broker said that while public sector insurers, apart from New India Assurance, are not very active in the e-commerce space, private general insurance companies have been focussing on this segment in a big way.

Mohanty said e-commerce firms are a big opportunity for insurers and the company is looking to tailor products to suit their requirements.

Insurers are now seeing increased traction for niche policies, such as cyber liability, which covers the policyholder against online frauds and data breach, and professional indemnity for their boards.

M Ravichandran, President-Insurance, Tata AIG, said e-commerce firms are now looking at buying professional indemnity policies as they have private equity investors who are also a part of their boards.

Interestingly, though cyber liability insurance is relatively new, demand for the product is picking up. For instance, Tata AIG has seen a 100 per cent growth in cyber liability policies, albeit on a low base, in the last quarter.

Mukesh Kumar, Executive Director, HDFC ERGO General Insurance, said that interest in cyber liability policy has picked up in the last few months and the company is in advanced stages of negotiations with several large e-commerce firms.

Industry experts say the pricing of these policies, which is on the higher side, has deterred many e-commerce firms. Broadly, for a cyber liability policy with a ₹10-crore cover, the premium is likely to be ₹10-11 lakh annually.

Sasikumar Adidamu, Chief Technical Officer, Non-Motor, Bajaj Allianz General Insurance, said that since cyber liability is a complex and technical product, the premium for the product would depend on various factors, such as the size of the company, nature of business, and experience of the entity.