Cyber Insurance: Investing In Your Data
Cyber security has become a risk so large that insurance companies have begun to quantify the value. Learn more here.
In the internet age, it’s normal to worry about the safety and security of your data and online information. However, what’s less common is to worry about your data being apprehended by hackers and used against you for means of blackmail, ransom or extortion.
High Stakes
For high profile people, diplomats, celebrities and uber-wealthy families, this concern is quite real. Online data—from our financial information to email and social media accounts—can hold tremendous amounts of sensitive information and personal insights. For high profile people, if this kind of information is released it can be tremendously damaging.
That is precisely why insurance giant AIG has just rolled out a cybersecurity product. According to Reuters, who reported on the launch this week, the product “offers coverage for expenses that arise from online bullying, extortion and other digital misdeeds. Called ‘Family CyberEdge,’ it includes public relations and legal services, as well as at-home assessments of family electronic devices, executives said in an interview.”
Insured Security
In fact, AIG is one of a few insurance companies that have launched similar products to serve their customers. Others include German insurer Munich Re, which devised a policy that insures people for malware and online fraud, as well as New York-based company Pure Insurance, which began offering a similar product in 2015.
For people who don’t perceive themselves at risk of cyber-crime, it might be somewhat surprising that such a policy would be necessary. But with the unstable political and economic climate, high profile individuals are aware that their information could be used against them by malicious or politically-motivated actors. Just look at the fall-out from the email hack of the Democratic National Committee last year, which some say cost Hillary Clinton the entire election.
Political Problems
New government regulations aren’t helping matters either. As Reuters noted, “The U.S. government is poised to undo some privacy protections. Congress last week voted to allow internet service providers like Verizon Communications Inc (VZ.N) and AT&T Inc (T.N) to sell consumers’ search data.” This uncertainty leads people searching for assurance—and insurance. As Robert Hunter, director of insurance for the Consumer Federation of America, was quoted as saying: “Whenever you see a lot of news about something that is a risk, you usually see insurance companies trying to jump on that.”
Best Practices
It’s worth saying that really there is much more people can do to protect their online identities beyond buying cybersecurity insurance policies. The best strategy is to prevent the worst case scenario from coming to fruition in the first place.
The most basic step is being cautious of what you post and social media and encouraging your family members to do the same. If you are a high-profile person, it’s easy to overlook the fact that determined internet sleuthers can find out a considerable amount from what you post, who you’re friends with, and what your family says online. Even putting accounts on private is sometimes not enough—just ask FBI head James Comey, whose pseudonymous Twitter and Instagram accounts were recently located by a determined journalist after he divulged some very basic information about his accounts.
You should also ensure that you use two factor authentication and unique, complex passwords across every account you operate. If your password to sensitive accounts like email have any words or phrases which are guessable (i.e. your child’s name or the street you live on) you are putting your information at more risk than you realise. Lastly, encrypting your most sensitive communication about finances or personal family matters is highly advisable if you truly feel you are a target.