Many businesses have realized they need commercial cyber insurance, but cybercriminals are also targeting individuals – with devastating consequences. Consider whether to purchase personal cyber insurance.
Cyber risks are everywhere
The 2022 Internet Crime Report from the FBI’s Internet Crime Complaint Center (IC3) shows that cyber incidents are common and lead to large losses. By 2022, 800,944 incidents were reported, resulting in losses of $10.3 billion.
Cyber attacks can take many forms, including:
- Ransomware: According to IC3, ransomware infections can affect both businesses and individuals. Because many attacks go unreported, it is difficult to determine the full extent of the damage.
- Phishing: In 2022, IC3 received 3,300,497 reports of phishing. Due to under-reporting, the actual number of phishing attacks may be much higher.
- Investment scams: IC3 says investment fraud was the costliest scheme in 2022, resulting in losses of $3.31 billion. Crypto investments have been on the rise.
- Call Center Fraud: IC3 considers tech and customer support systems as well as government impersonators to be call center scams. These systems are often aimed at the elderly.
- Confidence and Romance Deception: This category consists of scams where a fraudster pretends to be in a relationship with the victim in order to cheat the victim out of money. This includes romantic schemes (where the scammer pretends to be in a romantic relationship with the victim) and grandparent schemes (where the scammer pretends to be a grandchild who needs urgent financial help).
Cyber attacks are becoming more difficult to avoid
You may think you don’t need personal cyber insurance because you can simply use good cyber security practices to avoid cyber attacks. Unfortunately, this is getting harder.
- Deepfake technology makes fake identities more convincing. According to the 2022 Global Incident Response Threat Report from VMware, deepfake attacks have increased by 13%. Two-thirds of respondents said they had seen deepfake attacks in the past 12 months.
- AI tools give hackers an edge. Setting up fraud used to take time and effort, but that may be changing. CNET warns that hackers can use AI-powered chatbots to create scams with extreme efficiency. Axios says hackers are already using ChatGPT to write malware and phishing emails.
- Some cyber attacks happen no matter what you do. According to PC Magazine, zero-click attacks can compromise a device even if you don’t click on a malicious link. The CSO says zero-click attacks often target messaging apps, usually by exploiting a flaw in how they validate data. Although security patches can address these flaws, this is only possible after developers discover the flaw and make a fix. In the meantime, hackers can exploit the flaw.
- Smart devices give hackers more entry points. You try to keep your smartphone and computer safe – but what about your smart security system, fridge, thermostat, car, toothbrush and baby monitor? Many devices are connected to the internet, giving hackers more opportunities than ever to access your network. The FBI has warned that hackers can exploit connected devices to “make a virtual drive-by of your digital life.” Such smart devices are typically unsecured, giving hackers a way to access your router and, from there, everything on your home network.
What does personal cyber insurance cover?
Personal cyber insurance can provide individuals with financial compensation and expert guidance in the event of a cyber incident. Because coverage terms and benefits vary, you’ll need to review the terms of your policy to find out what it covers. Policies are likely to exclude certain types of losses, such as those linked to business activities.
Chubb says it has personal cyber policies that provide the following types of coverage:
- Coverage for cyber attacks. This may apply if you are the victim of cyber extortion, financial loss or a breach of personal information.
- Compensation for non-recoverable account funds and associated costs. This applies when a cyber attack causes certain types of financial loss.
- Financial compensation after cyberbullying. Cyberbullying is a growing problem and can be extremely disruptive to victims and their families. Insurance coverage can provide financial compensation to help people get their lives back on track.
- Access to qualified specialists. If you’re dealing with a ransomware attack or other cyber incident, you may need guidance from specialists to figure out your next move. In cyberbullying, policyholders can gain access to PR consultants and digital forensics companies.
Do you need personal cyber insurance?
Since cyber attacks can drain your finances and disrupt your life, it is always best to avoid them through smart cyber security practices. Use strong passwords and multi-factor authentication, secure your smart devices, watch out for phishing attacks and scams, and avoid known virus vectors, such as public phone chargers. In addition to these basic precautions, you may want to invest in personal cyber insurance. BNC can help you review your coverage needs and options. Contact Us.
