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Cyber insurance — is it necessary?

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Risk consultants advise cyber insurance is necessary, but policyholders are not always sure why. When business owners and professionals truly understand the value of their personal and financial properties, like one’s identity and hard-earned investments, it becomes easier to understand why it is necessary to “prepare for the worst and hope for the best.”

What is cyber insurance?

Cyber insurance is most commonly a standalone policy, written by an insurance company, to protect you, either as an individual or as a business. The next logical question might be, “Protect me from what, exactly?” A risk management consultant would advise that cyber insurance protects against all the bad things that could happen in this digitally-connected world. In other words, cyber incidents could include identity theft, fraudulent wiring of your funds to unknown places, a loss of employee safety, or a loved one experiencing cyber-bullying. Think about all the expenses like legal fees, time wasted, or emotional distress you could incur from such an incident. It’s necessary to have cyber insurance.

But we’re not a tech company — do we still need cyber insurance?

Absolutely. In fact, tech companies are somewhat less of a target due to hackers knowing these companies invest in cyber-crime prevention. In 2019 alone, cyberattacks across the board were up nearly 33%. Business email compromises (also known as BEC scams) doubled, which resulted in $16 billion in insured losses. Ransomware attacks were up nearly 66%. Joe Urquhart, vice president of Overmyer Hall Associates, has educated business owners across Ohio on how cybercrime affects even construction companies. Whether your business is in construction, financial services, retail/restaurants, or even the nonprofit sector, you are exposed to bad things happening.

If you’re a small to mid-sized business, statistically, you’re an easier target for cybercrime attacks. When you can meet with a trained professional who can locate the specific holes where your business is exposed (to bad things happening), you can be proactive in protecting your company’s safety and longevity.

Okay, maybe cyber insurance is important for a business, but I don’t manage one. Why do I need cyber insurance for my personal life?

Glad you asked. Cyber insurance is often overlooked when it comes to personal protection. You are smart, you are careful, but you are also human. Mistakes will happen, and it’s a good idea to have a backup plan for when they do. For example, perhaps you might be successfully tricked into thinking you need to pay a late credit card bill — yet the message was really a result of malicious cybercrime.

Hackers are good at what they do: they have the tricks to access your systems and get the information they want. Overmyer Hall Associates’ personal lines risk management team is proficient in advising proactive and secure measures, rather than you having to deal with avoidable consequences. But if (and when) those consequences do arise, having the safety net of cyber insurance is necessary.

What am I truly protecting myself from, again?

Here’s a list of occurrences you could encounter — but could also be protected from if you have the right cyber coverage:

Business / commercial cyber incidents:

  • Personnel files can be compromised.
  • Fake invoices created for the company to pay.
  • False wiring instructions.
  • Ransom demands to unlock your systems and servers.
  • Confidential business files viewable and saleable by a hacker.

Personal cyber incidents:

  • Personal identity theft.
  • Stolen credit card or bank account information.
  • Control of “connected home” devices.
  • Using your email address as a means to deceive others.

source: www.bizjournals.com