Insuring our digital lives

Cyber insurance should cover any losses incurred due to theft from financial accounts, as well as cover users for re-creating or replacing data and files, and any ransom that needs to paid to hackers in the event of a ransomware infection.

Insuring our digital lives

The world of interconnected devices known as the Internet of Things (IoT) is set to go mass market, with the smart devices market already worth tens of billions of Dollars annually. However, many consumers are rightfully concerned about how secure these devices actually are.

“There is no bullet proof security for IoT devices,” says MyCyberCare’s Simon Campbell-Young, adding that consumers need to think of other ways to protect themselves. “Let’s face it. A connected world is simply a wider surface area that is vulnerable to attack. Hackers have already managed to breach Internet-connected camera systems, toys, Smart TVs and even baby monitors. Consumers need to think of ways to protect themselves, and to see they are covered for any damages resulting should an event occur.”

According to him, traditional insurance players are growing aware of the fact that cyber risk is much more than a data breach. The IoT and other digital technologies go hand in hand with a slew of new threats that could impact on existing insurance cover. A breach or a system failure can cause all sorts of physical damage and theft too.

There are several ways individuals can be affected by a cyber attack. “Smart home radio signals could be intercepted and replayed to open a property’s doors and commit a burglary.  Hacking a car and causing it to have an accident on the freeway. A home’s thermostats could be hacked, causing a significant increase or decrease in temperature, leading to the spoiling of products. Similarly, a sprinkler system could be accessed in a malicious way, causing flooding and physical damage,” Campbell-Young says.

This is before we’ve even looked at the expected ways, such as getting infected with ransomware, in which a user is infected with a type of malware that prevents or limits him or her from accessing their system, either by locking the system’s screen or by locking the users’ files unless a substantial ransom is paid. “Wi-Fi networks can be hacked too, to steal financial information, banking login credentials or personal photos, or to read or send emails from the user’s account.”

Because technology has become an integral part of our daily lives, we need to think about insuring our digital lives too, he stresses. “Where there’s a danger, there’s usually coverage. Although cyber insurance till recently, was only available to companies, it’s now available for individuals too. This type of insurance will cover an attack on a user’s home network, PC, data or cloud.”

Anyone in the household who is using a computer is at some risk of cyber attack. “The majority of attacks will simply plant malware on a computer, but other attacks could damage software or even the operating system. And these incidents are expensive to fix, when considering data recovery, cleaning the machine and suchlike.”

Cyber insurance should cover any losses incurred due to theft from financial accounts, as well as cover users for re-creating or replacing data and files, and any ransom that needs to paid to hackers in the event of a ransomware infection. “However, the latter is controversial, as law enforcement strongly advises against paying in extortion cases, and it’s no guarantee the user will get his or her information back.”

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