In the ever-evolving world of cyber threats, businesses today face more than just data breaches and ransomware attacks. A growing menace that many aren’t even aware of—until it’s too late—is “bricking”. Combine that with the rising costs of hardware replacement, and the gaps in traditional Cyber Insurance policies begin to widen.
But here’s the kicker: many Indian businesses assume their Cyber Insurance will automatically cover any and all cyber damages—including to hardware. That’s not always the case.
Let’s break down what bricking really means, why hardware replacement is becoming a crucial part of Cyber Insurance, and how Indian policies are adapting to this new-age digital risk.
Cyber Risks Are No Longer Just About Data
Cyber Insurance has come a long way in India. Once seen as a niche product, it’s fast becoming a core part of business risk management. According to recent trends, Cyber Insurance uptake in India has grown significantly over the last few years. And yet, a majority of policyholders focus solely on data recovery, ignoring the physical cost of compromised hardware.
Imagine this: your company gets hit by a cyberattack that corrupts the firmware on your servers. The devices are rendered unusable. You can’t reboot them. You can’t reinstall the software. They are effectively dead—bricked.
This isn’t just an IT problem; it’s a business continuity disaster.
And that’s where bricking and hardware replacement coverage in Cyber Insurance come into play.
Understanding Bricking in Cyber Insurance
What Exactly is Bricking?
The term bricking refers to a situation where a device becomes completely non-functional due to a software or firmware issue—typically after a cyberattack. It’s called “bricking” because the device is now about as useful as a brick.
Unlike traditional hardware failure, bricking doesn’t necessarily damage the physical components. Instead, it corrupts the system at such a deep level—often the firmware or BIOS—that recovery is impossible without replacing the device.
How Does Bricking Happen?
Here are common ways bricking occurs:
- Ransomware attacks that lock devices with unremovable encryption
- Malicious firmware updates that overwrite critical boot instructions
- Corrupted BIOS settings due to hacking tools
- Wiping or destruction of operating systems beyond repair
In recent years, there have been increasing reports—globally and in India—of ransomware attacks leading to device bricking, especially when attackers tamper with firmware or BIOS. In several cases, businesses have had to replace a significant portion of their IT infrastructure due to permanent disablement.
Consequences of Bricked Devices
- Total loss of hardware functionality
- Unrecoverable business data
- Extended downtime
- High replacement costs
In short, bricking leads to physical loss from a digital cause—something many insurers have traditionally excluded.
Hardware Replacement in Cyber Insurance Policies
What is Hardware Replacement Coverage?
This component of Cyber Insurance covers the cost of replacing hardware that is no longer operational due to a cyber incident—like bricking. It bridges the gap between digital damage and physical recovery.
In India, hardware replacement is typically excluded from standard Cyber Insurance policies. However, some insurers now offer optional add-ons or customised riders that extend coverage to devices rendered inoperable due to specific cyber incidents, including bricking.
While Cyber Insurance usually focuses on intangible losses (data recovery, reputational damage, regulatory fines), hardware replacement adds a tangible layer of protection.
Why Is This Coverage So Important?
Let’s put this in perspective:
- Replacing a standard server can cost anywhere between ₹2 to ₹8 lakhs
- An enterprise with hundreds of IoT devices or POS terminals could face replacement costs upwards of ₹1 crore after a large-scale attack
- Delays in hardware replacement could lead to weeks of operational shutdown
Hardware replacement ensures that the business can bounce back—not just digitally, but physically too.
What Kinds of Devices May Be Covered?
Depending on the policy, the following may be included:
- Servers and storage units
- Workstations and laptops
- IoT devices
- POS (Point-of-Sale) machines
- Network hardware like firewalls, routers, and switches
It’s important to review your policy to see which types of equipment are explicitly covered.
Coverage for Bricking and Hardware Replacement in Indian Cyber Insurance Policies
How Indian Insurers View Bricking
This is where things get a bit tricky.
Traditionally, Cyber Insurance policies—especially in India—haven’t covered bricking. Why? Because many policies are designed to cover data and software, not physical hardware. They treat bricked devices as not “physically damaged,” which technically excludes them from replacement coverage.
But that’s beginning to change.
The Shift in Policy Wording
Some progressive insurers are beginning to acknowledge “logical damage”—referring to non-physical harm that renders a device unusable—especially in policies designed for larger organisations or with international extensions. However, the term is not yet standardised in Indian Cyber Insurance contracts.
Here are key phrases to look for in your policy:
- Coverage for logical damage to hardware due to malicious code
- Inclusion of permanent system disablement due to cyber incidents
- Tangible losses resulting from intangible cyber causes
Notable Indian Insurers Offering Such Coverage
Insurers in India offer Cyber Insurance policies that may be customised to include bricking and hardware replacement as optional modules. These add-ons are usually available to medium and large enterprises based on their risk profile.
Common Exclusions and Limitations
As with any insurance policy, the devil is in the details. Here are some common exclusions to watch out for:
Exclusions Related to Bricking and Hardware
- Damage not directly linked to a cyberattack
- Gradual deterioration or wear and tear
- Voluntary shutdowns or factory resets
- Bricking caused by non-malicious software updates
- Bricked devices that are technically “reparable” even if it’s impractical
Policy Sub-limits and Deductibles
Even if hardware replacement is covered, your policy may include:
- Sub-limits (e.g., ₹5 lakhs for hardware, regardless of actual cost)
- Waiting periods (e.g., coverage begins only after 48 hours of outage)
- High deductibles that reduce the payout
Reading the fine print—and negotiating terms with your insurer—is critical to getting meaningful protection.
Best Practices for Businesses in India
1. Conduct a Bricking Risk Assessment
Evaluate your infrastructure:
- How many devices are mission-critical?
- What systems are vulnerable to firmware attacks?
- Do you rely on IoT or outdated hardware?
Use this insight to estimate potential financial exposure.
2. Choose Cyber Insurance with Hardware Add-On
When selecting Cyber Insurance:
- Ask specifically about bricking and hardware replacement
- Request custom coverage or policy riders if necessary
- Consider bundled cyber and electronic equipment policies
3. Keep Firmware and OS Updated
While this won’t prevent every attack, maintaining updates and patches can reduce the risk of firmware-based exploits—one of the leading causes of bricking.
4. Maintain Backups and Offline Device Clones
Keep air-gapped system backups and spare hardware clones for critical operations. In the event of bricking, this ensures you don’t lose operational capability entirely.
5. Review and Renew Policies Annually
Cyber threats evolve. So should your insurance. Annually review:
- Whether the bricking clause is still relevant
- If sub-limits are realistic
- Any new exclusions introduced by the insurer
Final Thoughts
Bricking is no longer just a buzzword—it’s a real, growing risk in the age of sophisticated cyberattacks. Indian businesses can no longer afford to rely solely on traditional Cyber Insurance that covers only data loss or regulatory fines.
Hardware replacement coverage, especially in the context of bricking, is becoming a must-have component in your cyber risk strategy.
While the Indian Cyber Insurance market is gradually evolving, explicit coverage for bricking and hardware replacement remains limited and subject to case-by-case underwriting. Businesses must proactively negotiate such inclusions.
So, whether you are running a tech startup in Hyderabad, a manufacturing unit in Pune, or a retail chain across NCR—review your Cyber Insurance today. Ask the hard questions. Fill in the gaps. Because the cost of inaction could be, quite literally, the cost of replacing your entire IT infrastructure.
