Don’t think you need to be concerned with Personal or Home Cyber Insurance? Think Again.
Here's the scenario: You open up your computer and go to open one of your important files. Oddly, it's locked and you can't access it. Waiting for you in your email inbox is a message stating that your files are encrypted and if you want the decryption key, you need to click on a link and pay a hefty sum within 24 hours. If you fail to do so in 24 hours, the price doubles. If you don't pay in 48 hours, the decryption key will be destroyed and your files: gone forever.
As we have become more dependent on smartphones, smart home devices, and computers to make many parts of our lives easier and more convenient, this connectivity and technology comes at a cost in terms of potential risks and liabilities.
We are more vulnerable to having our personal data being hacked, our identities stolen, our computer frozen and our data held for ransom. The cost of cleaning up after having your identity stolen by crafty online criminals can run into the thousands of dollars, and criminals may also demand a ransom to unlock your computer if you've been hacked.
And the risks keep growing in number with new forms of fraud cropping up. Recognizing this growing trend, more home insurers are adding personal cyber insurance to their offerings, usually as an endorsement or a rider to a homeowner's or renter's policy.
For now, this market is in its infancy, but more insurers are adding coverage.
Where are some of the cyber risks that you face personally?
- The banking app on your phone.
- The online accounts and passwords stored on your computer.
- Your 401(k) app on your tablet.
- Virtual assistants like Alexa, Siri and Google Home.
What is covered in a Personal Cyber Insurance Policy?
Here are some of the most common risks that cyber insurance policies cover. Some policies may cover more of the risks than others, but for the most part these are pretty standard:
Financial fraud - The coverage would reimburse you for certain losses you sustained because of an unauthorized third party using one of your online payment services (like PayPal) or apps (like Venmo) to transfer funds.
Identity theft - If your personal data is breached online and someone steals your identity, the insurance would reimburse you for the cost of rectifying records with banks and authorities, as well as any time off from work you have to take to fix the problems. This includes the cost of a consultant who can restore credit records and personal identity.
Data restoration - If the data you store on your computer or laptop is compromised, deleted or rendered inaccessible, the policy could cover the costs for an IT specialist to clean your device of any malware and restore compromised data.
Ransomware - A growing type of cybercrime is ransomware, where criminals gain access to your computer if you click on a malicious link in a bogus e-mail. Once that link is clicked, they can gain access to your computer and freeze it, rendering it unusable until you accede to their demands of paying them a ransom, usually in Bitcoin.
Cyber insurance would reimburse you for the ransom payment and pay for the costs of IT specialists to mitigate the cyber-extortion attempt.
Cyber liability - If you are sued because someone accuses you of facilitating a transfer of data that was orchestrated by a cyber-attack on your device without your knowledge, the insurance would step in to provide coverage.
Cyber-attack - If a cyber-attack results in you being unable to access your home or needing to replace an electronic device, the coverage will reimburse you for the costs associated with resolving the event.
Cyberbullying - This coverage is twofold: It would respond to the costs if you are sued if your child is cyberbullying, or if one of your family members is the victim of cyberbullying and they need psychological counseling or legal advice. It could also cover the costs of online reputation restoration, where an IT specialist would attempt to remove or suppress offensive online content directed at your family member.
How does personal cyber insurance work?
If you are the victim of a cyberattack, you can file a claim to help pay for expenses (like legal fees or document recovery) and direct financial losses (like fraudulent credit card charges) covered by your policy. Your policy will have coverage limits and deductibles.
According the The Andover Companies, having the right protection in place could not only save you thousands of dollars, but also ease some of the stress of the situation.
How do I get a personal cyber insurance policy?
If you have a homeowners, renters, or condo policy, your insurer might offer personal cyber insurance as an endorsement. It is rather new and more and more companies are offering this valuable coverage.
Ask us if your insurance carrier offers cyber insurance as an add-on. If they don't yet, there's a good chance that they will in the future. Call today 617-846-5000, or reach out 24/7/365 here and tell us you're interested in getting a quote on a personal cyber policy.
Content from The Andover Companies and Forbes.com