With the promulgation of the Digital Personal Data Protection Rules, 2025, India finally enters a new era of legally enforceable data protection obligations. For organizations, this is no longer an abstract compliance exercise but a matter of real regulatory, financial, and reputational exposure.
What once might have been a single bad day involving a DPDPA incident can now trigger an avalanche of costs addressing forensics, legal defense, breach notifications, crisis communications, vendor fallout, regulatory investigations, and possible civil claims. It is in this paradigm that cyber insurance becomes yet more vital, as a prudent financial backstop in the absorption and management of such risks.
However, there is an important nuance present: fines under the DPDPA are still grey in terms of coverage. Though most cyber policies would cover regulatory penalties “where insurable by law,” the Act itself does not mention insurance. Careful risk governance, policy structuring, and wording of coverage thus become absolutely indispensable for any enterprise, said Evaa Saiwal, Practice Head – Liability, Cyber & Speciality Risk at Policybazaar For Business.
Consequently, under the DPDPA, cyber insurance is not just a tool for risk management but core to an organization’s ability to absorb the operational and financial shock of a data protection incident.
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