Cyber insurance for families: Can parents shield kids from online fraud and data breaches?

With the increasing use of online apps, games, and digital platforms, it has become quite common for families to face risks such as cyber fraud, identity theft, and privacy breaches. These incidents can lead not only to financial loss but also to stress and disruption in daily life. The good news is that cyber insurance plans are available on the market.

"Yes, families can be covered in retail cyber policies on a family floater basis. Minor children are covered in family floater policies, provided their parent(s) are also covered in that policy as insured," says Amarnath Saxena, chief technical officer–commercial, Bajaj General Insurance Limited (formerly known as Bajaj Allianz General Insurance Co. Ltd).

However, in the event of a claim related to online games or apps, admissibility will depend on the exact nature and details of the incident, as well as whether coverage for that type of incident is included in the policy.

"For example, if a child downloads and installs a seemingly genuine game from the Google Play Store, which is actually a fake app, and is prompted to pay for a subscription or make in-app purchases, and clicks on the “pay now” button. Money gets debited from your account, which is linked to the Google Play Store on that device. In such a case, the fraud is covered because the game app appeared genuine and was downloaded from a trusted source. However, if the game app is downloaded from a link that came in a WhatsApp message from an unknown number, and it results in the same type of loss mentioned above, then it will not be covered," explained Saxena.

When choosing a cyber insurance policy, it is equally important to carefully review the scope of coverage, exclusions, and the claims process. This ensures that the plan addresses the specific risks your family may encounter while engaging online. Cyber insurance is not one-size-fits-all, so families should take the time to understand the fine print and select the policy that truly fits their needs.

"Cyber insurance policy helps families to cover financial losses due to fraud or data breaches affecting children’s accounts. It also covers legal expenses for shielding claims arising from actions of an underage child, such as posting objectionable content or engaging in cyberbullying. Additionally, cyber insurance also provides professional support to restore compromised data or recover from identity breaches, giving families peace of mind in the digital age," said Ankit Gupta – Head of Retail Cyber Insurance, Policybazaar for Business.

With cyber threats becoming more sophisticated and frequent, a well-chosen policy can make a real difference. "It not only covers financial losses but also gives families confidence to use digital platforms without constant worry. Ultimately, cyber insurance, when combined with good digital habits, offers both protection and peace of mind. Two things that every parent values in today’s connected world," said Saxena.