What is Personal Cyber Insurance?

Summary: What is personal cyber insurance coverage, and why do you need it? Find out what it can cover and whether you should add it to protect against losses from a cyber attack or data breach.

How Much Cyber Insurance Do I Need? Loss Potential

The expanded remote work environment has led to unprecedented cybercrimes against individuals and businesses large and small. Some cyberattacks have been so pervasive and costly that there has been significant growth in the cyber insurance market. Personal cyber insurance generally covers the costs of attacks such as ransomware, fraud, identity theft and cyber-bullying (a recent addition). In some markets, insurance companies now offer cyber insurance as an add-on rider to homeowners' policies. Some specific protections include:

Do I Need Cyber Insurance?

It depends in large part on your cyber behavior and what type of data you store. If you are diligent about using the latest cyber security best practices, you already reduce your risk of an attack. Keeping passwords and private information safe is an ongoing task that requires serious attention, whether you are a personal user or own a small or midsized business (SMB). However, if you have already fallen victim to cyberattack attempts or someone connected to your network has, it is a good idea to purchase a policy.

Professional services, medical offices and small manufactures are currently at high risk of attack. According to the Identity Theft Resource Center, although 47% of attacks were less than $250,000, 26% of SMB cyberattacks were in the $250,000-$500,000 range. Without cyber insurance, this type of financial hit can put small companies out of business or wipe away years of profit.

Why Would Cybercriminals Target Me?

If you just have old photos, music and recipes on your computer then you probably do not need cyber insurance. SMBs are targeted because of the valuable data they hold and their lack of robust cyber protection. Cybercriminals can resell personal and financial data multiple times on the dark web, hold data for ransom or threaten clients directly to pay ransom. If you collect and store private information that can be used in any combination for identity theft or financial theft, you are liable to protect it. Small business owners often work from home, on personal phones or share computers with family members, increasing risk. All these devices must have strong security to protect business and private data. Many cyber insurers require proof of network security before issuing policies.

How Much Basic Cyber Security Do I Need?

Before getting any cyber insurance, do your own internal analysis of your cyber security best practices. At the very least, make sure you have these items:

Personal Cyber Insurance: Key Takeaways

Do you need cyber insurance? It is a way to reduce risk. Cyberattacks and data breaches are very time consuming and expensive. They can shut down operations and productivity for weeks or months and make clients turn away. Basic computer security and cyber insurance is far less expensive than a cyberattack. Contact your IT technician for ways to improve device, computer and network security and then schedule a talk with your insurance agent.