The cyber risks facing commercial insureds can be immense, considering the magnitude of losses that can arise after a company experiences a ransomware attack or data breach. In fact, a report from IBM and the Ponemon Institute recently found that more than 8.5 billion records were compromised in data breaches at companies in the span of one year ending April 2020, and the average cost of a mega-sized data breach was $3.86 million.
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However, cyber risk also extends to individuals and families, who have become victims in what one expert calls a growing “epidemic” of identity and credit fraud in the United States over the past two decades, which has been exacerbated by the move to work from home brought on by the coronavirus pandemic.
“Phishing attacks are being carried out in order to solicit private information from individuals, and cyber criminals can in turn use that information to steal identities or commit wire transfer fraud,” said Kareen Boyadjian, Director of Cyber & Tech Underwriting at the Tokio Marine HCC – Cyber & Professional Lines Group.
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The compromise of credentials has been a key concern for the Tokio Marine HCC – Cyber & Professional Lines Group cyber team for the past six months. In this environment, two demographics have been shown to be the most vulnerable to cyber threats: (a) children and teens, who spend a lot of time on social media apps where they can be exposed to phishing and malware, and (b) seniors, who tend to be more trusting and less familiar with technology.
“Unlike the business sector, which has access to cyber risk management services and cybersecurity resources, individuals and families often do not know who to turn to when they become the victims of cybercrime. That is why having a cyber solution that includes services such as a 24/7 hotline and professional remediation assistance is paramount right now,” said Boyadjian.
“Most people are familiar with ID theft and credit monitoring services, such as LifeLock,” she noted, “but such services are simply not enough when it comes to protecting against potential cyber threats that are impacting individuals and families.”
Enter Tokio Marine HCC’s NetGuard® SELECT, which aims to provide high-net-worth individuals with the comfort and peace of mind of knowing that when a cyberattack occurs, they’ll have state-of-the-art insurance from a leading cyber carrier, as well as access to risk management tools and privacy and security experts to help them respond quickly and effectively.
“One of the unique features of the NetGuard® SELECT form is the coverage provided for financial fraud resulting from an insured’s account manager being tricked into unknowingly sending money on behalf of the insured to a criminal who is posing as a legitimate or trustworthy contact. We understand that high-net-worth individuals are in many cases relying on account managers to handle their finances,” explained Boyadjian. “So, we built NetGuard® SELECT to specifically address that scenario.”
The policy also provides coverage for credit card fraud, data recovery, cyber extortion and identity theft. Additionally, NetGuard® SELECT offers coverage for losses incurred as a result of cyber bullying, including expenses for therapy and professional cyber security consultants, as well as private tutoring expenses, unreimbursed tuition or increased tuition, if the victim of cyber bullying is a minor, and he or she is unable to return to school due to the cyber bullying.
However, explained Boyadjian, “What really sets NetGuard® SELECT apart from other personal lines cyber forms is that it is a stand-alone cyber insurance policy. Most personal lines cyber insurance is tacked onto a homeowner’s policy, and an insured may not be provided with enough coverage or limits, or may even lose their coverage, if they renew their homeowner’s policy with a different carrier. A combination of robust stand-alone coverage, leading-edge cybersecurity risk management and direct access to cyber claims advocates in the event of a cyber incident makes NetGuard® SELECT one of the most unique and comprehensive insurance solutions for the evolving cyber risks facing high-net-worth individuals and their families.”
Considering the fact that 33% of US adults have experienced identity theft – more than twice the global average, according to cybersecurity firm Proofpoint – this type of personal lines cyber policy is becoming critical for individuals and families.
“With this ever-growing exposure, it’s important for everyone to have a solution in place moving forward,” said Boyadjian. “Personal lines cyber insurance is quickly evolving from being an ancillary coverage to a primary coverage. Agents should be proactively discussing the need for a stand-alone cyber solution with their clients, especially during a time when ‘smart’ devices and appliances are being used much more frequently and many people are working from home.”