Technology is pervasive and affords us access to information and services immediately. It also exposes each of us to the risk that a bad actor may steal our data or manipulate us into making critical errors. Cybercrime is exploding. The FBI received over 800,000 cybercrime reports in 2024, totaling $4.2 billion in overall expenses.
This demonstrates that each of us must safeguard our families from cyber events. There are a number of ways for you to protect your information:
- A service such as Lifelock, Threatlocker, or Aura. These are subscription services that protect against identity theft, cyberextortion, and viruses.
- Personal security choices. There are key steps that you can take to protect yourself:
- Passwords – do not use the same password; use a password manager.
- Assume that electronic communications are trying to trick you into making a bad choice.
- Use Multi-Factor Authentication, preferably from an Authenticator application.
- Never share your information with anyone else.
- Never trust a public network.
- Ask your employer to enroll you in a cyber security training program.
- Update your software regularly.
Consider adding coverage to your homeowners’ policy. This coverage can provide financial protection for losses resulting from a range of cyber incidents—including fraud, identity theft and data breaches.
The Growing Need for Personal Cyber Risk Management or Insurance
Your personal information is on the internet. Smart devices keep you connected constantly – whether it is your phone, computer, tablet, appliances, HVAC controls or security systems. This ecosystem is know as the Internet of Things (IoT). Insurance experts estimate that the average household possesses 50 IoT-capable gadgets. While these devices certainly offer several advantages, increased technology utilization also comes with greater cyber vulnerabilities.
As technology advances, so do the tactics of cybercriminals—resulting in more frequent and severe cyber events. Here are some of the most common cyber incident scenarios that individuals and their families may encounter:
- Bank fraud—This form of fraud entails a cybercriminal gaining unauthorized access to an individual’s electronic bank credentials, allowing them to transfer and steal funds from the individual’s account. According to a recent report from NortonLifeLock, cybercriminals steal over $200 billion each year via bank fraud.
- Identity theft—Such theft refers to a cybercriminal accessing an individual’s personal information (e.g., Social Security number or credit card number) and using it to commit fraud or other crimes under the individual’s name. The Federal Trade Commission confirmed that nearly 1.4 million complaints related to identity theft were filed last year, up 113% from the previous year.
- Data loss—In the event that an individual’s device gets infected with a virus or other malicious software (also called malware), they face the risk of losing any valuable data stored on that device. Viruses and malware can come from numerous avenues, including harmful websites, dangerous email attachments or infected USB flash drives—thus making data loss a major threat.
- Extortion—Ransomware incidents have contributed to a substantial rise in cyber extortion over the last few years. These incidents stem from a cybercriminal using malware to compromise an individual’s device (and any data stored on it) and demanding a ransom payment in exchange for restoration. In some cases, the cybercriminal may even threaten to publicly share the individual’s data if they don’t receive payment. According to cybersecurity experts, ransomware incidents have increased 500% since 2018, with the average ransom payment totaling over $300,000.
- Cyberbullying—While social media platforms allow individuals to connect with others, these platforms can also, unfortunately, be used for negative purposes, such as cyberbullying. This type of bullying includes refers to harassment, threats or other intimidating language that occurs via electronic means. Although anyone can be a victim of cyberbullying, kids and teenagers are particularly vulnerable. The latest data from Pew Research revealed that 59% of teens have experienced cyberbullying.
Considering these risks, we cannot ignore cybercrime. In addition to implementing effective cybersecurity practices noted above, you may want to consider purchasing a service or buying insurance.
Types of Personal Cyber Coverage
Personal cyber insurance varies between insurers. However, there are a number of key coverage offerings available:
- Online fraud coverage— Reimbursement for financial losses that may result from the various types of online fraud, such as phishing scams, identity theft or unauthorized banking.
- Identity recovery coverage— Reimbursement for the expenses associated with recovering from an identity theft incident (e.g., rectifying records with banks or other authorities, hiring a consultant to assist with credit restoration and taking unpaid time off from work to recover from the incident).
- Data restoration coverage— Covers the cost of having an IT specialist recover a device and restore any data stored on it if the device gets infected with a virus or malware.
- Data breach coverage—Coverage for the necessary notification and recovery services in the event that private, nonbusiness data entrusted to the policyholder becomes lost, stolen or published.
- Cyber extortion coverage— Pays for the expenses associated with responding to a ransomware event (e.g., consulting an IT specialist to mitigate the extortion attempt and restoring compromised devices or data).
- Cyberbullying coverage—This coverage can provide reimbursement for the costs that come with recovering from a cyberbullying incident resulting in unlawful harassment or defamation of character. These costs may include psychological counseling services, legal advice, and social media monitoring software. This coverage can also offer protection if an individual or their child engages in cyberbullying and faces subsequent legal action from the victim.
Please let us know if you would like for us to offer you an option for cyber liability insurance. You can reach Mark Lowman and Duke Baldridge at 540-366-7475 or email service@domrisk.com.