privateRISK: LEARN ALL YOU NEED ABOUT CYBER RISK MANAGEMENT

ADDITIONAL CHAPTERS IN OUR COMPLETE GUIDE

Private Family Cyber Risk Analysis

Personal Cyber Insurance

With cyber risk management being both a hot topic and a cottage industry, there are a lot of variables when it comes to insurance. Overall, personal cyber insurance is intended to supplement a homeowners or tenants policy and respond to digital intrusion, phishing/vishing, or other types of cyber attack.

Do Individuals Need Cyber Coverage?

Per the FBI’s Internet Crime Complaint Center, over $7.45 billion dollars of cyber crime has been carried out in the U.S. from 2014 – 2018. That is an average of $1.49 billion annually. That only includes losses reported to the FBI so it does not include data breach losses or other large scale issues. At privateRISK we feel that you should strongly consider a cyber insurance policy and you should learn all that you can about the risks associated with cyber loss. This is just part of a well-rounded private risk management strategy.

What Does Personal Cyber Insurance Cover?

Cyber insurances protect your family against a wide array of loss, including-

Systems Attack / Malware

If your devices are damaged by malicious software, your insurer will provide data recovery services and hardware replacement.

Cyber Extortion / Ransomware

Should your systems be taken and a ransom demand be made, your insurer has immediate access to cryptocurrency.

Digital Fraud

Should a bad actor access your accounts and steal funds, your insurance will reimburse you. 

Identity Theft

If your password, social security number, or other personal information is taken your insurance will provide identity monitoring, rebuild your credit, and investigate where the theft may have originated from.

Cyber Liability

If you are a victim of digital intrusion which spreads to other family, friends, or business associates, the right insurance program will protect you against any legal liability to arise from other party’s data breach, invasion of privacy, or extortion.

Cyber Bullying

 If you or a child is the victim of cyberbuylling, your insurance will pay for forensic investigation to find the culprit, counseling for your family, and even leaves of absence. If your child perpetrates the bullying, coverage may respond for legal defense.

Government Fines & Penalties

As individuals, you are unlikely to suffer fines related to a breach but operating as a family office, particularly if you manage money for other parties, can land you in some hot water if you are breached.

What Are The Limitations Of Personal Cyber Insurance?

Like any insurance, this is a reactive response, so we always counsel investment into your people, process, and technology before stressing insurance. However, there are a few additional areas where coverage may be excluded or limited. These include-

Fraud & Criminal Acts

Your coverage will not protect you if you have broken the law, hacked another party, or perpetrated some other offense.

Bodily Injury

In some instances with certain insurers, bodily injury could be covered. So be sure you have a product that responds for cyber related issues like texting while driving.

Employees Devices

If an employee of vendor is breached via there device and it filters to your network, there may not be response from your insurer.

Vendor Restrictions

Without pre-planning your crisis response, you may find that your vendors are not on the approved list with your insurer. Cyber coverage does not pick up vicarious 3rd party liability without specific underwriting approval.

Unencrypted Data

While not as strict as some commercial forms, if you have not taken prudent and reasonable measures to protect your data, your insurer may be able to limit a loss settlement.

Personal Cyber Insurance Claims Examples

What does personal cyber insurance do? Seeing a few live examples of personal cyber claims is a great way to understand the practical application.*

UNAUTHORIZED WIRE TRANSFER

A member discovered that $240,000 had been wired from his bank account.  The bank received an email purporting to be from the member and had called the members cell phone to validate the transaction.

The criminal had redirected the member’s cell number to the criminal’s phone and had confirmed the amount and wire instructions.

SOCIAL ENGINEERING: ASSET PURCHASE

A member’s assistant received an email appearing to be from the member requesting they wire $110,000 to finalize the purchase of a boat. Knowing the member was closing on a boat, and as an authorized bank user, the assistant wired the money.

The email had, in fact, come from a criminal who hacked into the member’s email account, reproduced the member’s typical wire instructions and took advantage of an imminent purchase.

THEFT BY DECEPTION: ASSET PURCHASE

A member was set to close on the purchase of a new property when he learned the sellers attorney had not received his $983,000 wire transfer.

As he looked into what had happened, it became clear that a criminal had sent an email from the law firm’s email server with fraudulent wire instructions, which the member had followed, wiring the money to an account in Hong Kong that had since been closed.

RANSOMWARE

A member was browsing the internet when they received a pop-up window stating their computer would be deleted unless a $10,000 ransom was paid within 24 hours.

In this instance, the member did not have Starling cyber coverage and was unable to be reimbursed for the loss of data or loss of the device.

*case studies provided courtesy of PURE Insurance