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3 Reasons Why High-Net Worth Individuals Need Cyber Insurance

An overview of insurance for high-net-worth individuals

Cyber insurance coverage for wealthy individuals is vital to a comprehensive personal insurance program.

Successful families and individuals are at an increased risk of cybercrimes and online fraud. Learn three reasons why high-net worth individuals need cyber insurance coverage.

  1. Targeted cyber attacks are increasing.
  2. People are spending more time online.
  3. Protect your reputation with cyber insurance.

Since the beginning of the pandemic, cybercrimes have increased significantly topping $4.2 billion in losses in 2020. Cyber crimes impact not only large corporations like Experian but individuals and families are now being targeted based on their net worth and reputation.

What are some common examples of cyber attacks that impact high net worth individuals?

Scenario #1: Phishing Attacks a Family Office

A family office employee receives an email late on a Sunday night from a family member requesting a rush wire transfer of $100,000 to a bank account for an art purchase. The family office employee transferred the money. They find out a week later through a phone call that the family member’s email was hacked and money was fraudulently transferred.

Total Damages: $100,000 – Social Engineering Coverage

Scenario #2: Social Media Extortion

A prominent social media influencer with over 150,000 followers has their social media account hacked. They receive an email from the hacker demanding a ransom within 48 hours before they will release the account access back to the owner.

Total Damages: $2,500 – Crisis Management Coverage & Ransom Coverage

Scenario #3: Law Enforcement Impersonators

An elderly client receives a phone call from someone who claims to be an FBI agent notifying them that their bank accounts and credit cards have been compromised and their family is in danger. The caller instructs the client to deposit money into an alternative account that the agent sets up. After depositing the money, she receives an additional call requesting more funds and realizes that she was being defrauded.

Total Damages: $5,000 – Online Fraud Coverage

3 Reasons Why We Recommend Insurance for High-Net-Worth Individuals

  1. Targeted cyber-attacks are increasing.
  2. People are spending more time online.
  3. Protect your reputation with cyber insurance.

 

  1. Targeted cyber-attacks of wealthy individuals are increasing.

Cyber-attacks are increasingly targeted towards wealthy individuals. Campden Research indicated that over a quarter of all ultra-high net worth international families and family offices have experienced a cyber attack in the past. Many times, individuals and families do not have the same cybersecurity protocols and guidelines in place that businesses and corporations do, making them high value targets for hackers and cyber criminals.

  1. People are spending more time online.

Screen time accounts for over seven hours of the typical American’s day. Cyber-attacks have increased significantly since the beginning of the COVID-19 pandemic and cybersecurity best practices are an important part of a comprehensive personal insurance program.  As more time is spent online and many successful individuals and families handle large purchases, bank payments, and wire transfers online, a cybersecurity program is crucial.

  1. Protect your reputation with cyber insurance.

The best high net worth insurance companies like Pure, Cincinnati, Chubb, and AIG now provide cyber insurance protection as an add-on to their home insurance policy. While monetary damages are a significant concern for many exposed to cyber-crime, reputational damage is a large concern for many families.

Victims may be targeted for their online influence, social media content and followers, and overall reputation in the community. A damaged reputation can arguably be more damaging to wealthy individuals than financial loss. Cyber insurance coverage for high-net-worth individuals provides third-party cybersecurity advice on how to prevent, manage, plan for, and respond to an attack.

Personal cyber coverage typically ranges from $300-$950 annually as an add-on to policy, depending on the coverage limit and deductible. Cyber insurance coverage has the following benefits:

  • Cyber-attack coverage pays security experts to recover data and restore systems that may have been lost or damaged following a malware attack on your devices.
  • Cyber extortion coverage provides professional support when responding to demands made by cyber hackers which can include damaging, distributing, denying access, or disabling content from your systems or devices.
  • Online fraud coverage provides coverage for direct financial loss due to forgery, counterfeit currency, illegal bank transfers, and other phishing schemes.

Cybersecurity and good cyber hygiene are important to a comprehensive personal insurance program for successful individuals. Contact an insurance advisor at Sterling Coverage to help implement an effective cybersecurity program and work with one of the best high value home insurance companies dedicated to you and your family.

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