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R&R Insurance Blog

Cyber Insurance: Protecting your Personal Data

Posted by Ryan Nowicki

Cyber Phone Secure slimmer2

As a homeowner, you are more connected than ever – your phone, computer, network, security system, even household appliances and equipment. These connections have enhanced our everyday lives, but they’ve also opened homeowners up to a wide new range of Cyber Attacks, Extortion, Fraud, and Data Breach. Adding Cyber Insurance to your Homeowners policy can help mitigate the risk created by the modern dependency on data.

Some of the most common Cyber Claims include:

  • Cyber Attacks – A targeted attack or unauthorized access or use of a computer or connected home device, including viruses and malware
  • Cyber Extortion – A demand for compensation based on a credible threat to disable, damage, or deny access to your devices, systems, or data, including an offer to restore functionality in exchange for payment
  • Fraud – Unauthorized use of personal information including credit cards, checks, or account numbers. This can include accepting counterfeit currency or falling victim to criminal deception.
  • Data Breach – The theft, loss, release, or publication of personally identifiable information in your care, custody, or control.

Cyber Insurance Endorsements can include the following coverages:

  • Identity Fraud Expense Reimbursement and Recovery Assistance
  • Data Recovery and System Restoration
  • Credit Card Fraud, Forgery, Cyber Crime
  • Cyber Extortion and Cyber Bullying
  • Breach Notification Costs
  • Cyber Protection Legal Expense and Damages Reimbursement

If you haven’t discussed your individual Cyber Risk, an experienced Personal Lines Insurance Consultant from R&R can explain the various coverage options and limits that are available to you. We can help design a plan to meet your individual needs.

 

4 Real-World Claims Examples

  1. Cyber Attack An insured opened a file in an email he received that contained a virus. The virus affected their computer, requiring the need to hire an expert to reformat the hard drive, reinstall the operating system, and restore data from a backup.
    Paid Loss after Deductible: $1,200

  2. Cyber Extortion An insured received a ransom email on their computer after they noticed that all files were locked. The email demanded a payment of $2,000 to obtain the decryption key. If the insured failed to pay within three days, the price would go up to $3,000. After that, the decryption key would be destroyed and any chance of accessing the files would be lost forever. After consulting with an expert and approval by the insurance company, the insured decided to pay the ransom.
    Paid Loss after Deductible: $1,500

  3. Fraud An insured received an email that appeared to be from a grandson, stating that he had been in a car accident and was in trouble. He was facing criminal charges and needed payment for a lawyer. 20 minutes later the insured received another email from someone identifying himself as his grandson’s lawyer, including an accident report and the costs to cover the damage. According to the email, the injured individual agreed to accept $5,000 to cover costs. The grandfather was told that the victim would sign a release as soon as that amount was wired and the insured’s grandson would walk away with a clean record. The money was sent as instructed. The next morning, the insured called his grandson and learned that none of this actually happened; he had been defrauded.
    Paid Loss after Deductible: $4,500

  4. Data Breach An insured volunteers at her children’s school and one of her responsibilities is to keep the teachers aware of students’ birthdays and lunch account balances. The lunch account information contains credit card numbers and other personally identifiable information. She keeps track of all this information on a spreadsheet stored on her personal tablet. She does not secure the tablet with a password so the critical data is unencrypted. While on a field trip, she lost the tablet. After consulting with her lawyer, the insured learns that she must notify people that their personally identifiable information was compromised.
    Paid Loss after Deductible: $4,200

 

 

 

Topics: Personal Insurance