Who needs cyber insurance? Today, it’s not just businesses that need online protection. It’s consumers who have a device. With so much of our personal information stored online, it’s helpful to know that there are options for protection.
Last year alone, there were more than 350 million people affected by data breaches. As the latest Data Breach Report from the Identity Theft Resource Center notes, “The vast majority of data compromises were linked to cyberattacks.” This follows a pattern seen over the last five years.
In a world where our lives are increasingly digital, encountering a cyberattack becomes possible. Living offline is no longer an option. To protect against the unexpected, many consumers are seeking cyber insurance for everyday assurance.
Who Needs Cyber Insurance?
It only takes a few minutes for hackers to apply for a loan or unemployment, all in someone else’s name. While not every consumer may be a target, most want to know how to prevent a worst-case scenario. Cyber theft can come with hefty financial consequences, especially when a safety net like cyber insurance isn’t in place.
Who needs cyber insurance? Let’s say there’s yet another large-scale data breach of a major corporation like Ticketmaster, where millions of consumers’ data is compromised. This can lead to a surge in identity theft, with victims facing fraudulent charges and phishing attacks.
Here are a few more real-life examples:
- Cyberbullying. A father notices derogatory social media posts targeting his teenage daughter. These include photos taken without her consent, criticizing her appearance, causing anxiety, and prompting her to ask to change schools.
- Cyber extortion. A professional gamer lets his guard down and accidentally installs ransomware by clicking an in-game URL. This encrypts his files, including videos, images, and documents, and starts randomly deleting them until he pays.
- Identity theft. An employee receives an email asking for personal data and posing as the online support team for her payment app. After providing this information, she doesn’t know her identity is being used until she’s billed for $7,200 worth of designer sneakers.
These examples only underscore how useful cyber insurance can be. Mass market consumers may choose cyber coverage to protect against thousands of dollars in financial loss that could cause unneeded strain. Affluent and high-net-worth consumers may want added protection against being targeted by cybercriminals due to their financial status.
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What Does Cyber Insurance Cover?
Expanding on the examples above, here are several key areas where cyber insurance can prove essential:
- Cyberbullying. Cyberbullying gets worse as the use of social media rises. Over 60 percent of children and 40 percent of adults have been targeted by cyberbullies. This includes consumers who were fired or arrested because of repeated online harassment.
- Cyber breach of privacy. Data breaches can compromise sensitive personal information, leading to severe privacy violations or reputation damage. Cyber insurance can assist with the costs of managing data recovery and mitigating the fallout.
- Cyber disruption. Disruptions to digital services can have severe consequences. Cyber insurance can help cover the costs of business interruption and data recovery efforts.
Cyber extortion. Ransomware attacks, where hackers demand payment to release a device, are also on the rise. Cyber insurance can provide coverage for costs associated with negotiating with cyber extortionists and paying ransoms.
- Cyber financial fraud. Financial fraud entails stolen money out of bank accounts or fraudulent charges on a debit or credit card. This may even include a tax refund being paid to a fraudulent party or assets being stolen from a hacked gaming account.
- Deceptive transfer fraud. This type of fraud involves someone pretending to be a person or company a consumer might be doing business with, who then misleads them into transferring money to them.
- Electronic data restoration. In the event of data loss or corruption, cyber insurance can cover the expenses associated with data restoration and recovery efforts. This might look like car hacking that makes a vehicle unusable or downloading a malicious code that deletes all a consumer’s data.
- Electronic device replacement. Suppose a consumer has their computer fixed. During the repair, it’s damaged. Cyber insurance can help cover the additional repairs.
- Identity theft. Personal information can be surprisingly vulnerable. If a bad actor gets access to a consumer’s information, it makes it easy to steal their identity to take out loans, credit cards, or unemployment benefits. Cyber insurance can aid in identity restoration and cover related expenses.
One of the biggest benefits of cyber insurance is gaining financial coverage for costs associated with data breaches and cyberattacks.
Legal fees, psychiatric services, credit monitoring, identity theft relief services, and ransom money are all under the umbrella of potential protection. With so many options for coverage, cyber insurance provides consumers with peace of mind that their financial well-being is safe.
As a recent PYMNTS Intelligence Survey revealed, consumers are interested in purchasing cyber insurance from their financial institution.
Consumers say that trust in a financial institution is the number one reason they’re interested in purchasing insurance from them. Even above cost. This is likely because consumers may feel less secure buying insurance from a source they don’t recognize.
Tiered coverage amounts meet the needs of different consumer segments. Custom messaging, along with coverage, can address unique concerns and ensure the right offer gets to the right consumer. For families, all-in-one coverage for all devices within a household might be the best fit. Meanwhile, a high-net-worth individual may gravitate toward larger coverage amounts.
There’s Never Been a Better Time to Offer Cyber Insurance
And if you’re already providing cyber and other insurance products, now’s the perfect time to enhance your offerings and drive stronger results. Contact Franklin Madison to learn how.