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The Economics of Cyber Insurance for Indian SMEs: A Strategic Risk Management Approach
Subject area: Management and Commerce · Area of research: Cyber Insurance for SMEs
DOI: https://doi.org/10.64388/IREV9I11-1717652
Abstract
This paper investigates the strategic necessity and economic viability of cyber insurance for Indian Small and Medium Enterprises (SMEs). As SMEs are increasingly targeted and lack extensive cybersecurity budgets, a single cyber incident can be catastrophic. The study argues that cyber insurance serves as a vital risk transfer mechanism, covering critical first-party costs (e.g., forensics, business interruption, extortion) and third-party liabilities (e.g., regulatory fines, legal fees). Crucially, the approach emphasizes that insurance is effective only when integrated with proactive cybersecurity hygiene as part of a holistic risk management strategy.
References
[1] Gordon, L. A., & Loeb, M. P., "The Economics of Information Security Investment", ACM Transactions on Information and System Security, 2002
[2] Data Security Council of India, "Indian Cybersecurity Landscape: SME Vulnerability Assessment", DSCI Publications, 2022
[3] Insurance Regulatory and Development Authority of India, "Cyber Insurance Market Review and Trends", IRDAI Journal, 2023
[4] Reserve Bank of India, "Digital Payment Security Challenges in MSME Sector", RBI Working Paper Series, 2021
[5] Ministry of Micro, Small and Medium Enterprises, "Annual Report on Digital Transformation of Indian SMEs", Government of India, 2023
[6] Kumar, A., & Sharma, R., "Cybersecurity Challenges in Emerging Economies: An SME Perspective", International Journal of Information Security, 2022
[7] NASSCOM, "India Cyber Security Report: Threat Landscape and Future Preparedness", NASSCOM Publications, 2023
[8] Patel, S., & Desai, M., "Risk Transfer Mechanisms for Digital Enterprises", Journal of Insurance and Risk Management, 2022
[9] World Bank Group, "Financing Solutions for SME Digital Resilience", World Bank Reports, 2023
[10] Cybersecurity Ventures, "Global Cybercrime Damage Report", Cybersecurity Ventures Publications, 2023
How to cite this paper
@article{1717652,
author = {Shubham Vishnu Rokade, Aman Sudesh Naraskar, Vaibhav Kalu Donde},
title = {The Economics of Cyber Insurance for Indian SMEs: A Strategic Risk Management Approach},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {9},
number = {11},
pages = {1497-1501},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1717652.pdf},
abstract = {This paper investigates the strategic necessity and economic viability of cyber insurance for Indian Small and Medium Enterprises (SMEs). As SMEs are increasingly targeted and lack extensive cybersecurity budgets, a single cyber incident can be catastrophic. The study argues that cyber insurance serves as a vital risk transfer mechanism, covering critical first-party costs (e.g., forensics, business interruption, extortion) and third-party liabilities (e.g., regulatory fines, legal fees). Crucially, the approach emphasizes that insurance is effective only when integrated with proactive cybersecurity hygiene as part of a holistic risk management strategy.},
month = {May},
doi = {https://doi.org/10.64388/IREV9I11-1717652}
}