Why personal lines cyber is a growing need for consumers

When a company has been cyber breached, they are obligated to tell their clients their data’s been leaked. But personal consumers may be more likely to bury their shame and eat the cost of the cyber scam—even to their detriment, insurance leaders shared at an industry conference.  

“[With] the romance scams you hear about on the news, people don’t want to tell other people they fell for it, so they bury it,” said Neal Jardine, global cyber risk intelligence and claims director for BOXX Insurance. “Insurance is available, but it’s often [about] making clients realize it.” 

Plus, with many workplaces hybridizing, some small- to medium-sized business owners are mingling their business and personal accounts—and putting their client’s data at risk alongside their own—an expert shared during the Insurance Brokers Association of B.C. (IBABC) AGM and Leader’s Conference in Whistler, B.C., in June. 

“It’s not popularly discussed, but they commingle their business, and there’s a lot of their business stuff that’s happening in their Gmail accounts and their Yahoo accounts and so forth,” said Chris Hendricks, head of Coalition’s incident response team.  

“It’s just important to make sure that there is something that covers their business, [so] that [you’re not] in that gray area where some business-related things or any personal information [are mingled].”  

As Canadians become more digital, consumers are more at risk. Nearly half (43%) of Canadians have knowingly fallen victim to cyber fraud or scams in their lifetime, according to an Ipsos survey. 

The most confident of clients are the ones most at risk, according to Jardine. His company sees little correlation between a client’s age and their claims likelihood. 

“[In] personal lines cyber coverage, the [claims] we see the most frequently are the ones who tell me they bought it, but they really don’t need it because they’re smart and they know what they’re doing.” 

According to Ipsos, older Canadians (aged 55+) are among the least likely to report having knowingly been victimized by fraud or scams at some point in their lifetime (31% vs. 50% aged 18-54). By comparison, almost two-thirds (63%) of younger Canadians (aged 18-34) admit that they’ve knowingly been the victim of fraud or scams at some point in their lifetime. 

Credit card fraud is most commonly reported (21%), followed at a distance by debit card fraud (8%) or online phishing scams (8%). 

But cyber insurers are still getting the word out about the extensive personal cyber coverage options. For example, clients may be covered for social engineering, invoicing fraud, phishing scams, or privacy breach, depending on their policy.  

“If you run the local soccer team, and all of a sudden your computer gets lost or stolen or someone gets into it, there are some requirements around the data that’s on there,” Jardine said regarding privacy breach.  

According to the Ipsos survey, only about one in four fraud victims (27%) report telling family members about the fraud and even fewer (22%) shared their experience with friends. “A majority (54%), albeit a surprisingly slim one at that, claim to have reported the incident to their financial institution.”

Clients may not be aware of cyberbullying protection coverage, which gives policyholders resources to stop their children from the effects of online harrassment.  

“We’re now operating in a digital world. Kids aren’t just getting bullied in the playground; they can be bullied online,” said Jardine. “If you have children and your children are exposed to bullying online, we’ll basically pay for a psychologist, for you to take time off work, [and] legal assistance,” and so on. 

But for many clients, personal cyber coverage is a simple add-on to an existing home policy. Michael Trendler, managing director, specialty insurance at Travelers Canada shared that personal cyber coverage is pretty inexpensive and easy to obtain.  

“It’s really cheap. It’s easy to get from an underwriting standpoint,” he said. “From a sales standpoint [for brokers], the market growth just been crazy. We’ve seen a huge uptick in the last two or three years.” 

Feature image by iStock.com/RainStar