Cyber Insurance For Individuals
Insurance

Cyber Insurance For Individuals (All You Need To Know)

Posted by

It has now become more important than ever to consider cyber insurance, given the ever-growing reliance we now have on technology and the threats as a result of cybercrime.

As someone who seeks to protect himself or herself from the financial impact that results from a personal data breach, identity theft, etc., it’s only paramount that you opt for cyber insurance for individuals.

When it comes to protecting yourself from the financial impact of a cyber attack, cyber insurance is a must. But the query now is: what exactly is cyber insurance, and what are its requirements?

So in this article, we’ll break down the basics of cyber insurance for individuals and every other important detail you may need concerning it so that, by the end, you’ll have a good understanding of whether cyber insurance is right for you and your unique needs or not.

What is Cyber Insurance?

Cyber insurance is a type of insurance that provides you with financial protection against losses that result from cyber activities like data breaches, identity theft, etc.

There are some cases where cyber insurance will have to cover losses that are related to business interruptions and lost profits.

You might wonder or have a query like, how dangerous is cybercrime? Well, in 2020, the FBI’s Internet Crime Complaint Center received a record of 791,790 complaints on cyber crimes.

Not just that, this cancer can also be very expensive and difficult to recover from. Because of those 791790 complaints, over $4.2 billion was lost by individuals and families.

That is to say that each attack results in an average loss of $5,300 for the victims. So, are you still contemplating purchasing this policy?

Importance of Cyber Insurance for Individuals

Below are the benefits of cyber security insurance for individuals:

1. Financial Protection

Cyber insurance can cover the cost of repairing or replacing your damaged systems, paying legal fees, and much more.

In some cases, cyber insurance may also cover your lost income due to a system outage or other business interruption.

This insurance is very crucial for you to make sure your finances are well secured in the event of a cyberattack. You can also be reimbursed for covered costs associated with a cyber incident.

2. Peace of Mind

Another key benefit of cyber insurance is the peace of mind that comes with knowing you’re protected. With this insurance, you can solely focus on the steps you need to take to recover from a cyber incident, rather than worrying about the financial impact.

Also, knowing that your finances are protected can allow you to focus on rebuilding your systems, restoring your data, and providing your customers with the support they need.

This peace of mind can make a big difference in the aftermath of a cyberattack.

3. Business Continuity

In the event of a cyberattack, having the right insurance policy in place can help you get your business back up and running as quickly as possible.

So a very important feature of this insurance is that it enables your business to keep operating even in the face of challenges and attacks.

Cyber insurance can also provide legal support in the event of a data breach. Let’s assume your business is the victim of a cyberattack. You may face legal action from affected customers or clients.

In this scenario, cyber insurance can provide you with access to legal experts who can help you navigate the legal process and defend your business against any claims.

Types of Cyber Insurance for Individuals

The following are the types of cyber insurance for individuals:

Personal Cyber Insurance

Personal cyber insurance is a type of policy that covers individuals for cyber-related risks such as identity theft, cyber extortion, cyberbullying, etc.

This insurance can provide coverage for expenses that are related to these incidents. It’s important to note that this type of insurance doesn’t cover business-related cyber incidents.

Home-Based Business Cyber Insurance

Home-based business Cyber insurance is similar to personal cyber insurance, but it’s designed specifically for home-based businesses.

This type of insurance can provide coverage for expenses that are related to a cyber incident such as lost income, legal fees, and more.

Umbrella Cyber Insurance

Umbrella cyber insurance provides additional coverage for cyber incidents. Umbrella cyber insurance can be a valuable addition to your policy if you have unique risks or need more coverage than your basic policy provides.

Medical Cyber Insurance

Are you wondering if medical cyber insurance is different from health insurance? Well, it is. Medical cyber insurance is a completely separate policy from health insurance.

While health insurance covers medical expenses, medical cyber insurance specifically covers expenses related to a cyber incident involving medical data. This can be an important distinction, especially for those in the healthcare industry.

How Much is Cyber Insurance for Individuals?

The cost of cyber insurance for individuals can vary depending on several factors, but on average, personal cyber insurance can cost anywhere from $50 to $500 per year.

However, it’s important to keep in mind that this is just an average, and your specific policy may be more or less expensive.

Pros and Cons of Cyber Insurance for Individuals

Pros

  • This insurance protects you against a variety of cyber risks
  • It gives you peace of mind in knowing you’re covered in the event of a cyber incident
  • Cyber insurance helps you take care of expenses that are related to a cyber incident.

Cons

  • The cost of this policy is high
  • There is a possibility of not being covered for all the risks
  • You might have your claim denied if you don’t meet the requirements for filing a claim.

What to Consider Before You Purchase This Insurance

Before you invest in cyber insurance, you should ask yourself these questions and carefully answer them:

How Much Coverage Do You Need?

The biggest concern when you’re deciding how much coverage you need is the kind of risks you are going to face.

What do you stand to lose if an attack occurs? Then whatever your answer is, is what will guide you in making this decision.

If your financial risk is high, you may need to consider a specialty policy from a company that handles high-value insurance, such as Chubb, AIG, or PURE.

What Events Does the Policy Cover?

Different companies and policies cover different cyber events. But at a minimum, your policy should be able to cover:

  • Cyberbullying
  • Ransomware attacks
  • Viruses and malware
  • Identity theft.

What Will the Policy Pay for?

Just because a policy covers a specific event, such as identity theft, doesn’t mean it will pay for all the expenses you might incur. You will need to pay close attention to what your policy pays for and make sure the list includes stuff like:

  • Extortion payments
  • Equipment replacement
  • Software replacement
  • Lost wages
  • Identity theft restoration services
  • Legal fees, etc.

How is the Company’s Customer Service?

Most times, customers think only about price and ignore customer service. The cheapest policy in the world won’t be of much use if you can’t get your insurance agent on the phone when you’ve suffered a cyberattack.

To find out about this, you can start by visiting the Better Business Bureau’s website to read about the company’s reputation.

You can also check out some credit rating agencies, such as Moody’s, S&P Global Ratings, and J.D. Power rate insurance companies, to have this information at your fingertips.

Requirements for Cyber Insurance for Individuals

The following are the requirements for an individual’s cyber insurance:

1. Regular Scans for Viruses, Malware, and Other Threats

These are important features of any cyber insurance policy that are performed using antivirus software, anti-malware software, or other security tools.

The essence of this is to look for known viruses, malware, and other threats that could compromise the security of your devices and data.

If any threats are found, the scans can remove them or quarantine them to prevent them from compromising your device or data.

2. A Robust Password Policy

A robust password policy is another key requirement for cyber insurance. For your password to be regarded as robust, it should be at least 8 characters long and contain a mix of upper and lowercase letters, numbers, and special characters.

A robust password should not contain personal information, such as your name, address, or birthday, and it should not be reused across multiple accounts.

And lastly, you should use two-factor authentication (2FA) whenever possible. This adds extra security by requiring a second form of authentication, such as a one-time code sent to your phone.

3. Regular Data Backups

You have to back up your data regularly, ideally daily or weekly, and the backed-up data should be stored in at least two locations.

Local backups are stored on a physical device, such as an external hard drive, and are useful in case of an emergency.

Cloud backups are stored on a remote server, which can be accessed from any internet-connected device. This makes them useful if your physical devices are lost or damaged.

4. A Secure Home Network

A secure home network starts with a router that has a strong password and is configured with WPA2 encryption.

WPA2 is the strongest encryption available for home networks and is much more secure than WEP, which is an older and less secure encryption standard.

A strong password should be at least 8 characters long and contain a mix of upper and lowercase letters, numbers, and special characters.

You have to ensure that it is unique to only your home network and not used for any other accounts.

5. Regular Security Updates

Manufacturers always release patches to patch security vulnerabilities and protect devices from new threats. Without regular updates, your devices and software are at risk of being compromised.

Regular updates should be applied to all your home devices, such as computers, phones, tablets, smart home devices, etc.

You have to also keep your software, such as operating systems and web browsers, up-to-date. Some devices and software can be set to automatically update when new updates are available.

6. A Virtual Private Network (VPN)

A virtual private network (VPN) is another security measure that can be used to protect your online activity.

The essence of a VPN is to encrypt your internet traffic and route it through a secure server, making it much more difficult for hackers to intercept your data.

7. Regular Monitoring of Financial Accounts

While you secure your devices and software, it’s equally important for you to monitor your financial accounts for suspicious activity regularly.

This can help you catch any unauthorized charges or transactions and take action on time to protect your finances.

8. A password manager

A password manager is a tool that can be used to store and manage strong passwords. It can generate random but secure passwords for all your online accounts and store them in an encrypted database.

This means you only need to remember one master password to access all your other passwords. A password manager can also be used to fill in login information automatically, making it easier to access your accounts on different devices.

9. Regular Security Training is Required

Regular security training is important for everyone in your household who uses the internet. This can help you understand how to stay safe online and protect your family’s information.

Training should cover topics like password security, avoiding phishing scams, and safe online shopping.

You can find online resources and training courses to help you with this training, or you can create a training program for your family.

The more your family knows about internet security, the safer you’ll all be online.

10. A Locked Mailbox

A locked mailbox is an important physical security measure to protect your sensitive information, such as your paper statements from banks and other financial institutions.

It also contains other documents that contain your personal information, such as tax forms and your health records.

This simple measure can help prevent identity theft and keep your information safe.

FAQs on Cyber Insurance for Individuals

Is cyber insurance required by law?

Cyber insurance is not required by law, but it's highly recommended for individuals and businesses that store sensitive data.

Is cyber insurance worth the cost?

Cyber insurance can be worth the cost if you have a lot of sensitive data that could be exposed in a data breach. However, it's important to weigh the cost of the policy against the potential risks you face.

Does cyber insurance cover ransomware attacks?

Many cyber insurance policies do cover ransomware attacks, but it's important to check the policy details to be sure.

Does cyber insurance cover business losses?

Many cyber insurance policies do cover business losses, including lost income and extra expenses incurred as a result of a cyber incident. However, not all policies are the same, so it's important to check the details of your specific policy. Business interruption coverage is often an optional add-on to a cyber insurance policy.

Does cyber insurance cover personal losses?

Generally, cyber insurance does not cover personal losses. It's designed to protect businesses and organizations, not individuals. If you're concerned about personal losses related to a cyber incident, you may want to consider identity theft protection. Identity theft protection can help you recover from a data breach and protect your personal information from being used fraudulently.

We Also Recommend:

Conclusion

Cyber insurance is an important tool for protecting yourself and your business against the financial costs of a data breach.

However, you need to understand the details of your policy and make sure it covers the specific risks you face.

For more information, you can speak to a licensed insurance agent or read the fine print of your policy.

You can also channel your questions and suggestions to the comment section below if you have any, but before that, kindly go through the FAQ section to see if any of your questions or challenges have been taken care of.

Total
0
Shares
Share 0
Tweet 0
Pin it 0
Share 0