Protection for Individuals to Counter the Growing Cyber Threat

August 19, 2019

The same gadgets and technology that have made life more convenient and help people pass the time, unfortunately can leave you and your family members exposed to a variety of cyber-related attacks.

Online crime is rising fast and anyone that uses the internet, e-mail or smartphone apps risks exposing themselves and their personal data. This risk even extends to your kids downloading apps on their tablets.

Because of this growing threat, some insurance companies have started including certain cyber-specific coverages in their homeowner's policies, or as a rider. Some of the coverages that homeowner's insurers have begun offering are:

Digital content coverage - Replaces or repairs affected electronic data property that has been compromised.

Unauthorized charge reimbursements - This coverage protects credit cards from fraudulent charges made without your approval.

Identity access management - Helps with fraud resolution if your identity has been stolen in a cyber attack.

Document recovery - Assistance with retrieving, replacing or recreating lost, stolen or destroyed legal, financial or personal identification documents.

Lawsuit protection - Coverage for allegations of unintended libel, slander, defamation or invasion of privacy.

Additional cyber protection rider

But most of the coverages in homeowner's policies for cyber issues are not really that comprehensive. Better protection comes in the form an additional cyber protection rider (which has to be paid for separately as a rider to your homeowner's policy).

Depending on the insurance company, these riders may include coverage for:

  • Computer attack
  • Home systems attack
  • Cyber extortion, and
  • Online fraud

Some examples of these types of coverage include:

Cyber extortion and ransomware - Provides payments and professional assistance in responding to cyber extortion demands based on a credible threat to damage, disable, deny access to or disseminate content from devices, systems or data.

Cyber financial loss - Covers online fraud that results in a direct financial loss to you.

Cyber-bullying - Assistance in dealing with online harassment that results in wrongful termination, wrongful discipline from school or debilitating emotional distress.

Cyber disruption - Support for dealing with cyber attacks that prevent you from accessing your home, or attacks that interrupt a small business you run from home.

Cyber breach of privacy - Assistance dealing with theft, loss or unauthorized access to personal data from a cyber attack that results in defamation of character or puts the security of your family and home at risk.

Compromised or destroyed data - Pays to recover data and restore systems that have been lost or damaged due to a cyber attack. This would include attacks involving malware or unauthorized use of owned or leased computers, mobile devices and connected home devices.


Here are some scenarios that a cyber protection rider may cover:

Scenario 1 - Your son receives an e-mail and opens an attached file or clicks on a link that contains a virus that infects the computer, rendering it unusable. You have to hire professional to reformat the hard drive, reinstall the operating system and restore data from the latest back-up. The services cost $900.

Outcome: The professional's charge is covered by your policy.

Scenario 2 - You receive a pop-up message on your computer after you are unable to access any of your files. The message tells you that all of your data has been locked and encrypted and the only way to unlock them is to pay a $1,500 ransom to receive the decryption code. Further, if you don't pay promptly, the ransom price will increase by $500 a week and after three weeks the code will be destroyed, and your files will be permanently deleted.

Outcome: The insurer determines the threat is real and agrees to reimburse you for paying the ransom.

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