In today’s world of Artificial Intelligence (chat GPT and similar platforms reached 100 million users in three months of being rolled out to the public compared to the internet which took over 10 years to reach that amount of users), online shopping, online communication and socialising and almost all transactions performed by business and service providers being contained either online in the cloud or on servers, one can see the very real dangers that if one is able to hack into these systems that contain the clients, bank accounts, financial statements and all personal data of companies and individuals there is much bigger risk of loss and damage than there ever was.
Think of it this way, instead of thieves having to break into the bank, or a company’s factory or your personal vehicle or home by cutting fences and picking locks to steal clothes or goods, the thief only needs to know how to hack into your bank account, your smart home or you online shopping account. Many people have profiles in cyber accounts such as facebook, twitter (known as X today) linked in or Instagram. If one hacks into those accounts, one can cause havoc given reputations today can be destroyed with one politically incorrect post. Children or adults suffer from what we call cyber bullying to the extent that it psychologically can harm one more than physical violence. Companies can have their systems hacked and be prevented from functioning or servicing its clients and have their clients data erased. This is becoming more and more common with either ransom being demanded or they do it just to show they can.
In order to protect us against these very real dangers, Insurers have looked at products that can provide cover to prevent this from happening and if it does to help us recover from it with expert service providers and indemnity products. Standard insurance covers normally exclude all cyber related incidents, because they have become so common and can be really expensive and also because the cover needs to be carefully drafted to make sure real protection is given.
Cyber insurance covers a wide range of risks and losses associated with cyber incidents, such as data breaches, network security failures, and cyber attacks.
Some of the common coverages include:
- First-party coverage: This type of policy covers losses sustained by the policyholder directly, such as loss of income due to business interruption, loss or damage to digital assets, and cyber extortion.
- Third-party coverage: This type of policy covers losses sustained by third parties, such as customers or clients, due to the policyholder’s actions or failure to act. This includes coverage for legal defense costs, settlements, and judgments related to data breaches, network security, and privacy violations.
- Errors and omissions coverage: This type of policy covers losses resulting from professional services provided by the policyholder, such as technology services or consulting, that result in financial loss for the client.
- Media liability coverage: This type of policy covers losses resulting from the policyholder’s electronic media content, such as websites, blogs, and social media, that result in defamation, invasion of privacy, or intellectual property infringement.
Other add-ons for personal lines clients often include covers for online shopping, cyber bullying, kidnapping where passwords and log in codes are forcibly obtained to force clients to make bank transfer and withdraw cash as well as identity theft which can be very harmful. It is recommended to check these options out if one is not protected given the huge frequency of cyber-attacks taking place all the time and the many attempts being made by criminals all over the world to send what we called phishing mails and sms’s with false links to allow them to gain entry into your phones, laptops and systems. No longer are the criminals close to you they can literally be anywhere in the world. Protect yourselves now and procure cyber insurance.