Personal Cyber Insurance

The smart solution for you

Look around — you will find it hard to find people without a cell phone. And why wouldn’t people use cell phones? After all, technologies like cell phones have made our lives easier and smarter. Not to mention, riskier, too! Your phone, laptop, or any smart device exposes you to the risk of falling victim to a cyber-attack. In fact, even when you turn off your phone or computer, you aren’t immune to cyber threats. A complete boycott of technology could be the solution, but, honestly, it is a far-fetched one. Increased cybersecurity is another solution, but sometimes tight security only delays the hackers, making it an incomplete solution. That’s why you need cyber insurance, also known as cyber liability insurance.  

In this article

Why Do You Need Personal Cyber Insurance?

  • According to Statista, in 2018 the average cost of cybercrime in the US amounted to 27.37 million and the number of cyber incidents was approximately 31,107.
  • In 2019, the Cybersecurity and Infrastructure Security Agency reported a global increasing trend in ransomware attacks. The ransomware attacks skyrocketed in the US.
  • A single claim can leave you with hefty bills that are difficult to manage on your own.
  • Cyber insurance covers not only lost funds due to breach of payment account details but also the costs of consultation.

What is Personal Cyber Insurance?

Personal cyber insurance is the contractual agreement between you and your insurer whereby your insurer agrees to compensate in the event of a loss due to cyber-related risks, in return for a monthly premium.
what does personal cyber insurance cover

What does Cyber Insurance Cover?

Your personal cyber liability insurance policy offers you the following coverages:

Financial Fraud

Your insurer reimburses financial losses caused by unauthorized uses of your online payment services. For instance, you disclose your online banking credentials to a phishing scam, and the hacker uses the details to steal funds from your account. Since you have cyber insurance, your insurer will cover the financial losses and the costs incurred to block and reissue payment cards.

Identity Theft

Theft of credit card details followed by unauthorized use of funds to make purchases are not uncommon. When this happens, you need to rectify the situation immediately. Your insurer not only reimburses the consultant costs to restore personal identity and credit records, but also the cost of the unpaid leave that you’d take to meet with bank authorities.

Online Shopping

Beware of online shopping portals that look legitimate but are a sham. You may place orders or make payments, but may not get the deliveries. Fortunately, your personal cyber insurance reimburses the amount spent. Additionally, it also covers you in cases of damaged and wrong deliveries.

One click and you may fall prey to hefty cyber-related losses.
But through personal cyber insurance, you can transfer your risks to your insurer.

Cyber liability

Hackers could use your smart device to orchestrate cyberattacks at any time. Especially, if your devices don’t have adequate cybersecurity.  Additionally, there are risks of losing your employer’s and other people’s sensitive data from your device. As a result, you may face liability claims due to the transfer of sensitive data, breach of personal rights, etc. Personal cyber liability insurance policy takes care of such claims against you.

Cyber Extortion

Ransomware can be pretty ugly. The hackers encrypt your data, which makes it unusable without a key. You can fall victim even with cybersecurity in place. The hackers ask you for ransom (often in Bitcoins) in return for the key. Ransomware has spiked in the US, and if you are next in line, count on your cyber insurance as it reimburses the ransom payment. The insurance company also compensates for the costs of consulting IT specialists while mitigating cyber extortions.

Cyberbullying

Whether your child is the one cyberbullying or is the  victim of it, cyberbullying has severe repercussions. In the former case, you may face lawsuits on the perceived failure of supervising your child properly. The latter case could include the costs of a psychologist consultation and ongoing therapy, and in severe cases, even the costs of moving the entire family to a new location and school. Personal cyber insurance reimburses all expenses related to a psychological consultation, relocation costs, legal advice, litigation costs, online reputation restoration costs, etc.

Despite implementing a solid cybersecurity approach, the risks of cyberattacks persist. Thankfully, cyber liability insurance covers you from taxing financial repercussions.

how much does personal cyber insurance cost

Some Common Exclusions of Cyber Insurance

As important as it is to understand the coverages, you should be familiar with the exclusions. Below are the most common exclusions of personal cyber insurance:

  • No compensation if you fail to maintain minimum security standards.
  • Often, cyber insurance does not cover bodily injury and property damages caused by cyber incidents.
  • Insurrection, terrorism, war, or invasion.
  • No compensation for wrongful acts or claims arising prior to the retroactive date.
  • Lost devices such as laptops, phones, etc.
  •  It is always wise to talk to your insurance agent or insurance carrier to clearly understand the exclusions. Also, you can personalize your personal cyber policy through endorsements.
Is cyber insurance worth it?

Be it through smart devices installed in our home or our cell phones that contain tremendous amounts of data, hackers find ways to steal sensitive data such as your social security number, credit card details, bank account details, and so on. The cost of cybersecurity measures to mitigate and resolve cyberattacks can be immense. You may incur losses due to unauthorized use of your bank funds; hefty litigation costs; the costs of consulting IT specialists; or restoration costs, etc. Your personal cyber coverage can cover all such costs.

How can I buy cyber insurance, and what is the cost?

You can either purchase a standalone policy with extensive coverages or you can opt for an add-on to your homeowners insurance. Insurance carriers like Chubb, AIG, PURE, etc., offer endorsements to your homeowners insurance to cover cyber risks at prices ranging up to over $1000 per year. Furthermore, you may get coverage through your business insurance policy.

When do I need personal cyber insurance?

Personal cyber insurance’s basic function is to compensate you for losses due to cyber-related risks like cyber extortion, cyberbullying, phishing, or ransomware. There are greater cyber risks today than ever. In fact, the US is considered one of the most vulnerable countries when it comes to cyber-attack. You never know when hackers will breach your data which makes now the best time to get personal cyber insurance.

One click and you may fall prey to hefty cyber-related losses.
But through personal cyber insurance, you can transfer your risks to your insurer.