Legal Assessment of Cyber Insurance in Iran with Emphasis on Challenges and Problems

Abstract

The rapid expansion of information technology and the development of economic activities in cyberspace have given rise to new forms of risks and losses for which traditional compensation mechanisms alone are inadequate. Cyber insurance, as a modern instrument for risk management and risk transfer, can play an effective role in compensating losses arising from cyberattacks, data breaches, disruptions to information systems, and in enhancing economic security and public trust. The present study aims to assess the capacity and effectiveness of Iran’s legal system in relation to insurance coverage for losses arising from cyberspace and to identify the principal challenges and obstacles to its development. The study employs a descriptive-analytical method based on library research and a comparative approach. The findings indicate that, although the general rules governing insurance contracts, including the principles of good faith, insurable interest, indemnity, and subrogation, possess the necessary theoretical capacity to accommodate and regulate cyber insurance, the absence of comprehensive and specialized regulations, ambiguity concerning the legal nature of data and digital assets, difficulties in assessing and proving non-pecuniary losses, the lack of clearly defined limits of liability for persons and entities operating in cyberspace, and the absence of specialized risk-assessment standards constitute some of the most significant barriers to the development of this field in Iran. Furthermore, international sanctions have adversely affected the capacity to transfer and manage cyber risks by restricting access to reinsurance markets, global data resources, and the updating of technological infrastructure. Accordingly, the effectiveness of Iran’s legal system in the field of cyber insurance may be characterized as “conditional and transitional.” The enactment of comprehensive and specialized regulations, the establishment of technical standards for risk and loss assessment, the strengthening of supervision by the Central Insurance of Iran, the expansion of cooperation among legal, insurance, and technology institutions, and the development of specialized informational and expert infrastructures are among the principal requirements for establishing an efficient cyber insurance market in Iran.