Understanding Cyber Insurance Policy: Personal & Commercial Coverage
Cyber insurance is no longer a luxury, but a necessity in our increasingly digital world. Whether you’re an individual managing your personal finances online or a business handling sensitive customer data, the risk of a cyberattack is ever-present.
This article aims to break down the key components of personal and commercial cyber insurance policies, ensuring you understand exactly what your clients are covered for before a claim becomes necessary. Understanding the coverage upfront can help you, as an insurance broker, ensure your clients are covered as well as save them time, money, and stress in the event of an incident.
Personal Cyber Insurance:
Personal cyber insurance policies typically cover a range of incidents affecting individuals and their families. Common coverages include:
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- Theft of Fund: When funds are lost due to cyber incidents or hacking of your accounts (bank, cards, mobile wallet). Cover includes investigation costs, lost funds, overdraft/default fees, and legal fees to prosecute the thief. For example, if you’re tricked by a spoofed email and lose money, you’re covered.
- Identity Theft Protection: This covers expenses related to restoring your identity after a data breach, including legal fees, credit monitoring, and notification costs. It may also include reimbursement for lost wages due to time spent resolving the issue. Example: Your hacked email or a company data breach leads to your stolen info being used for fraud (accounts, loans, online transactions, tax/medical aid).
- Data Restoration/ Malware Decontamination: Covers IT expert costs to restore your data/software or replace computer parts if needed. For example, if malware encrypts your files or damages your device, we’ll help restore it.
- Cyber Bullying/Stalking: Covers costs to remove online bullying/stalking material, your lost income, legal fees, reputation management, trauma counseling, and school transfer expenses if needed. For example, if your child is cyberbullied and becomes depressed, or you’re threatened online and lose your job/suffer trauma, you’re covered.
- Network Security Liability: Covers IT expert costs to investigate a network security incident, plus legal costs and settlements. For example, if your hacked device damages someone else’s, leading to a lawsuit, you’re covered.
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- Cyber Extortion: If you’re the victim of ransomware or other cyber extortion schemes, this coverage will help verify the ransom demand and try to restore your systems/data. If necessary, we’ll cover the ransom and other reasonable costs to resolve the incident. Clicking a malicious link/attachment installs ransomware, encrypting your data and demanding payment, OR you’re threatened with private info being published unless you pay.
- Privacy & Data Liability: Covers IT investigation costs, legal fees, and settlements if your hacked device/email leads to stolen personal data being used fraudulently, causing others to take legal action against you.
- Privacy & Data Breach By A Third Party: This covers your legal costs taken against a company if their data breach leads to your personal information being stolen and used for identity theft.
- Online Shopping: Covers your financial loss if online goods/services you ordered for personal use aren’t delivered. For example, if you buy something online and the seller disappears, you’re covered.
- Express Kiddnapping: Covers funds/property surrendered in an express kidnapping. For example, if you’re kidnapped and forced to withdraw cash until your accounts are empty, you’re covered.
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Commercial Cyber Insurance:
Commercial cyber insurance policies are designed to protect businesses from the financial fallout of a cyberattack. These policies often include:
- Data Breach Liability: This covers the costs associated with a data breach, including notification costs to affected customers, credit monitoring services, legal fees, and regulatory fines.
- Network Security Liability: This protects your business if your network is compromised and used to attack other systems.
- Cyber Extortion: Similar to personal policies, this covers ransom payments and related expenses in the event of a ransomware attack.
- Business Interruption: If a cyberattack disrupts your business operations, this coverage can help recoup lost income and cover expenses incurred to get your business back online.
- Media Liability: This covers claims related to defamation, copyright infringement, or other media-related offenses that may occur online.
- Professional Services: Similar to personal policies, this can cover the cost of IT specialists, legal counsel, and public relations firms to manage the incident.
- Cyber Liability Cover: This covers third party claims due to a network security or privacy breach including regulatory fines & penalties.
- Theft of Fund: When funds are lost due to cyber incidents or hacking of your accounts (bank, cards). Cover includes investigation costs, lost funds, overdraft/default fees, and legal fees to prosecute the thief.
- Data Breach Liability: Helps cover the costs associated with lawsuits and regulatory fines that may arise following a data breach. This includes expenses related to notifying affected individuals, providing credit monitoring services, and defending against legal claims.
Key Considerations:
- Policy Limits: Understand the maximum amount each insurer will pay for each type of coverage and ensure your clients know this as well.
- Excesses: Like with all other policies, cyber insurance will have an excess.
- Exclusions: Carefully review the policy exclusions, as certain types of cyberattacks or incidents may not be covered.
- Claims Process: When partnering with Howdie, we make managing claims for your clients as easy as 1,2,3 – and it’s no different with cyber claims.
By understanding the specifics of personal or commercial cyber insurance policies, you can ensure your clients have the right protection in place and avoid unpleasant surprises at claim time.
Don’t hesitate to ask your broker consultant for more information on cyber insurance with Howdie Insurance Administrators.
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