With all the Cyber Attacks recently on major corporations and middle market businesses it’s time to take a look at your homeowners policy to make sure you have the right coverage for yourself. |
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Here’s an unwelcome scenario: You open your personal laptop and attempt to open a file, only to find your files are locked. You have a message waiting in your inbox. It says your files are encrypted and if you want the decryption key, you need to click on a link and pay $2,500 in bitcoin within 24 hours. If you don’t pay, the price goes up to $5,000. If you fail to pay the ransom, the decryption key will be destroyed and your files will be lost forever.
You’re the victim of cyber extortion.
While this might sound like the generic plotline of a late-90s thriller, it’s a real possibility and a growing threat. More than 4,000 ransomware attacks have occurred every day in the United States since 2016, according to the FBI. That’s a 300% increase since 2015, which averaged 1,000 ransomware attacks per day.
Cyber extortion is hardly the only online threat you need to worry about. Cyberattacks also include sending viruses, identity theft, data breaches, fraud and cyberbullying. Aside from direct financial losses, like paying a ransom or having a thief run up your credit card bill, you might face other financial consequences. You could have expenses to restore your identity and data, legal fees for lawsuits, and even temporary living expenses due to cyberbullying.
If you’re concerned about protecting yourself and your family from cyberattacks, you’re hardly alone. Nearly two-thirds of consumers are worried about a cyberattack and almost one-third have already experienced an attack, according to a 2019 survey by Verisk, a data analytics company. Some insurance companies now offer personal cyber insurance to help cover some of these risks. Here’s what you need to know.
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What Does Personal Cyber Insurance Cover?
Personal cyber insurance, also called “cyberattack insurance,” is often sold as an add-on to homeowners insurance and can cover a range of cyber crimes:
- Cyber attack coverage pays for the removal of a virus or reprogramming of desktops, laptops, smartphones, tablets, Wi-Fi routers and other internet access points, such as smart home devices and security systems.
- Cyberbullying coverage helps you deal with online harassment that results in wrongful termination, discipline from school, temporary relocation expenses, temporary private tutoring, lost wages and legal expenses.
- Cyber extortion coverage helps you recover from ransomware attacks that block you from accessing your personal data and demanding a fee to regain control. This coverage might include assistance from experts who can help you regain your files and reimbursement for any ransom paid, if approved by your insurance company.
- Data breach coverage helps pay for services if personal data entrusted to you is lost, stolen or published. For example, if you sell tickets for a school fundraiser and have credit card information from buyers on your tablet and the tablet is stolen, this coverage would pay for services to the individuals who were affected by the data breach.
- Online fraud coverage pays for direct financial losses due to problems like identity theft, unauthorized banking or credit card transfers, phishing schemes and other types of fraud.
In addition to the above types of coverage, personal cyber insurance might include services such as:
- Access to fraud specialists who can assist you throughout the recovery and resolution process
- Active cyber monitoring to help prevent or minimize a cyber loss
- Lawsuit protection for allegations of unintentional online libel, slander or invasion of privacy
- Replacing or repairing electronic data
- Retrieving, replacing or recreating financial or personal identification documents
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. The policy will have a coverage limit and a deductible.
For example, if you have a cyber insurance policy that has online fraud coverage with a $15,000 policy limit and a $500 deductible, and you were the victim of an online scam and donated $2,000 to a fake charity, you would get an insurance check for $1,500 ($2,000 minus $500 deductible).
In some cases, your insurance company might approve ransom payment for cyber extortion
cases. But don’t pay it without getting your insurance company’s approval. The FBI recommends not paying ransom as it does not guarantee release of a decryption key and, in some cases, the cyber criminals demand more ransom after the first payment.
For more information on how to better protect yourself, contact ACBI via email or at 203-259-7580 with any questions.
Article Courtesy of Forbes.com
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