Malicious cyber-attacks are becoming increasingly prevalent. Most recently, David Beckham’s PR agency was hacked by a group seeking a £1 million ransom in a ‘cyber’ blackmail attempt. It is reported that some 18.6 million messages and documents were stolen.
David Beckham and his team refused to pay the ransom and the resultant publication of numerous private email messages between Beckham and his PR agency has, according to some, left his and “Brand Beckham’s” reputation in tatters.
Hackers are increasingly targeting specific victims including high net worth individuals. Indeed, in the U.S one of the most notable cyber insurance developments of 2015 was the introduction of an insurance policy designed to protect the individual rather than businesses.
Of course security breaches are not always caused by hackers. Personal data can often be compromised, either deliberately or unintentionally, by financial advisors, household employees and trusted confidants.
High net worth individuals have vast wealth, access to sensitive and valuable commercial or personal data and often high public profiles which makes them attractive targets for criminals.
Third parties such as personal assistants and other employees managing homes, collections and finances or caring for children may also be targeted because they provide an easier gateway into the individual’s systems and network.
Of course, the impact of cybercrime, whether for individuals or businesses, is far reaching and is often overlooked. It can affect reputation, finances, IT networks and physical security with the result that high net worth individuals are often left vulnerable to cyber troll activity, bullying and stalking.
In light of this growing risk, high net worth individuals and families are increasingly turning to cyber security consultants to carry out online security reviews such a penetration testing and to provide advice on preventative measures.
It is not yet clear to what extent bespoke cyber cover for high net worth individuals is available in the UK although a number of UK high net worth insurance policies will include family/office cover and cover for some elements of cyber risk.
The financial and reputational consequences of cyber risks can be devastating and whilst prevention is better than cure, those high net worth individuals who wish to mitigate the effect of a cyber-attack or breach should give serious consideration to the type and extent of insurance available.
In particular, they should discuss with their broker whether their insurance includes cover for:
- Cyber extortion and ransomware events
Cyber extortion cover reimburses any ransom paid as well as any consultant’s fees for the negotiation and transfer of funds relating to a ransom attack.
- Hacker damage
In other words, the cost of repairing or replacing digital assets and systems damaged by a hacking attack.
- Privacy breach costs
This includes cover for claims and lawsuits brought against the high net worth individual for cyber related property damage or personal injury arising from events such as cyber-stalking or even physical theft.
- Cyber identity theft restoration
This is designed to cover the cost of restoring an individual’s personal identity and/or credit records making use of credit monitoring and identity restoration services.
- Financial loss
To cover unauthorised use of credit cards and electronic fund transfers resulting from cyber-attacks.
- IT Forensic costs
Providing immediate 24/7 support from cyber specialists who are able to assess systems, identify the source of any breach and put in place future preventative measures.
The frequency and ease of hacking, cyber stalking and cyber extortion crimes is staggering and in order to avoid becoming a victim (so far as is possible) high net worth individuals should consider carrying out a cyber-risk audit and arranging comprehensive insurance cover in order to mitigate their risks.
However, whilst it is possible, with the right assistance from specialist insurance brokers, to arrange cover for cyber risks, the fact that the cyber industry is rapidly developing and highly complex means that disputes over policy wording and the arrangement of appropriate cover when claims arise are to be expected. If you require any advice in relation to cyber insurance cover or cyber insurance claims please contact Nicola Maher at Edwin Coe.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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