Cyber Security, Cyber Crime, Cyber Attacks…these are words we hear more and more every day as the Internet grows larger and the world grows relatively smaller. However you are thinking about these, first and foremost in your mind should be insurance. That should be followed by the question, “Am I covered?”
Cyber security insurance coverage is a huge–and growing–field, and must be considered in terms of:
Who (who is covered individually or as part of a business?)
What (what parts of your home or business are covered, and what is your risk?)
Where (did it occur—through email, a security system, a phishing scam, the internet, etc.?)
We all think it’s never going to happen to us—that we will never fall victim to a scam—but according to the October 2018, Consumer Cyber Insurance and Security Spotlight Survey, 63% of Americans have at least one connected device at home. Many have connected smart home devices like thermostats, or even wear a personal fitness tracker. Others have connected security cameras, door locks or appliances.
While so much of these are part of our everyday lives in this technological age, we tend to not think about insurance while connecting these devices. We don’t consider what we would do in the event of a cyber crime.
Let’s first take a look at what exactly cyber crime insurance is.
You may have heard various names for this, such as cyber crime insurance, personal cyber-risk insurance, Internet crime insurance, personal cyber insurance, or cyber protection insurance. Though it comes in many names, it is essentially insurance for individuals against losses in the event of a cyber attack or cyber crime.
Cyber crime coverage is no different from the “regular” insurance coverage you’re used to, in that each policy can be different. Just as you would before buying that regular coverage, always ask precisely what the coverage entails, what risks are covered, and what the conditions and exclusions are. There hasn’t been an “industry standard” put in place yet for cyber crime, so make sure you know exactly what you have, and that it is pertinent for your situation.
Coverage to Consider
As the online world shrinks, types of cyber crimes grow. Here are a few types you may be susceptible to, so use this as a guide of coverage questions to ask, ‘What happens in the case of…’
- Cyber extortion
- Phishing scams and assistance with aftermath if successful
- Identity theft and assistance with aftermath if successful
- Financial loss if it has occurred through your financial institution
- Data restoration and assistance if your business files have been compromised
- Cyber bullying or internet stalking
When considering your options, you may be offered standalone cybersecurity coverage for your business, or it may be part of a package policy with your home policy (you may hear this as a ‘high value home policy’).
I Have Home and Business Insurance; Am I Covered Now?
Because there hasn’t been an industry standard set, you may think your home or business insurance covers this tightwire of cyber crime. However, it is precisely because of this lack of industry standard that you may, in fact, not be covered at all, even though you have interconnected devices.
Standard home insurance policies usually do not include this coverage, but because the cyber crime world is growing, more and more are beginning to offer it, sometimes as an ‘endorsement.’
It is vital that you talk to your insurance company to find out what is covered, and where it may be lacking. Ask what products they offer, or if an endorsement is right for your situation.
I’m Barely Online, Do I Really Need It?
The short and simple answer to this question is a resounding yes. If you connect to the Internet at all in any way, or have any connected devices in your home or business, you are susceptible to a cyber attack. Everyone is vulnerable to the myriad types of cyber crime, whether you are a super-savvy tech guru, or a once-a-week video chatter.* Technology is more a part of our daily lives than we probably realize.
How Much Will This Cost?
Just like any other insurance coverage, there’s no real set answer to that question. It’s going to depend on your individual situation and what you need for your protection. Check with your present insurance company, or do a bit of checking around to help you understand various costs when comparing various coverage. You may find that it’s a free endorsement or addition with your present home insurance policy. There are currently a growing number of companies that specialize in this coverage.**
The Bottom Line
In today’s world, cyber insurance is a necessity.
You always make sure you have home, auto, fire, business insurance—make sure you are cyber-protected also. The stakes are too high to play roulette with your business or home. Call us at John Scott Insurane Agency for more information on how we can help you put this important coverage in place.
* Some sobering statistics, including by state, from the Internet Crime Complaint Center: cyber crime incidents.
** Cyber Market Update Report, AON — US insurers writing cyber insurance in 2017.