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New Coverages Protect Individuals Against Loss from Data Breaches
As the recent data breach at Capital One reminded us, living much of our life online can be convenient, but it also can be risky. For some time, insurance carriers have offered commercial clients coverage for many costs related to data breaches and hacking at their companies. But now, some carriers are offering coverage for consumer clients too.
Before the advent of these kinds of policies, individuals had fairly limited options. Those options still exist, of course. For example, if you think you might be a victim of a data breach, you can call your bank or the company that issued your credit or debit card and ask for a new card. Of course, in that case you have to change the card information on anything charged automatically to that card.
You also can monitor your account for at least several weeks. Monitor daily; don’t wait for your statement. If you see something unusual, alert the card issuer or the bank where your account is.
Some people proactively set up a text alert that they receive whenever their card is used remotely rather than being handed to the cashier. You also can set up an alert if your card is charged or your account is debited for a specific amount, such as anything over $50. Most of these alerts will not signal a problem, but it is always better to be safe than to be sorry.
But policies that are now available for individuals provide much more extensive protection. They do more than limit your financial losses if someone uses your credit or debit card fraudulently. For example, they can include coverage for things such as:
In addition to coverage of financial losses, many policies can provide professional assistance in understanding how the cyber-attack or breach occurred, in fixing your hardware and software, and in making your cyber-presence safer going forward. This assistance can include bringing in computer and financial experts, and even advocating for you in the legal system, if necessary.
- Cyber-attack, including the cost of recovering data and restoring systems.
- Online extortion, including professional help in responding to extortion threats to make private information public or to destroy your computer system.
- Online fraud from a variety of illegal schemes.
- Cyber-bullying, including untrue allegations that can damage your career or your business or professional reputation.
- Identity theft, including costs related to getting new identification as well as losses from the theft such as unauthorized purchases, lawsuits arising from the identity theft, or difficulties being able to access your home, financial services, etc.
If you have a strong online presence – for example, if you bank and invest online, if you run your home security system online, if you communicate sensitive or personal information online, or if you shop online often or for expensive items – personal lines cyber protection policies might be something for you to consider.
We would be happy to talk to you further about insurance coverages for cyber-crime and data breaches, as well as about any of your risk management or wealth management needs. You can contact us at 847-572-0828 or firstname.lastname@example.org.