Sophisticated fraud targets businesses, customers feel the pain

The news is full of headlines relating to businesses that have fallen foul from attacks by cyber hackers stealing information or paralysing computer systems in the hope of securing a ransom payment. However, the personal and financial cost to individuals and families from the cyber threat is not always so well covered, but this shouldn’t imply that there isn’t a problem.
 

According to a 2017 report from cyber security experts Norton, the global cost to consumers in that year alone from cybercrime was £130 billion.

A particularly common threat proving to be rich hunting grounds for the predatory hacker is a relatively new scam often known as payment diversion fraud – also referred to as social engineering –  where a hacker manages to trick an individual into paying what they think is a bona fide bill to the wrong account, usually via an email phishing attack.

One recent example saw a Hiscox 606 customer who regularly buys artwork, decide to make an acquisition of a new piece priced at £40,000. On receiving an email from the “art dealer” requesting payment, the buyer sent the bank transfer for the full amount. However, after the real dealer contacted the insured to chase for payment, it was discovered that the original email the buyer received was a scam and that she had in fact transferred the funds to a hacker. The hacker had been monitoring the conversation between the two parties and had created a rule in the buyer’s email account that deleted the genuine dealer’s emails, enabling the hacker to intercept the conversation and send their own bank details.

Another Hiscox 606 customer was in the process of purchasing his dream home. After receiving an email from who he thought was his solicitor (who he was expecting to hear from), he made a very large payment to cover the cost of the property. However, when his actual solicitor called requesting payment a few days later, the home buyer realised that his money had gone to a hacker who had been monitoring the conversations between himself and the solicitor. Again, as with the artwork deception, the hacker had deleted the solicitor’s legitimate emails in the buyer’s email account and had been sending bogus emails from a dummy account.

Needless to say, these were very unfortunate and upsetting cases for the customers. In both scenarios, neither customer had personal cyber cover and although Hiscox forensic teams worked with the victims' brokers on an ex-gratia basis to help secure their email accounts, they were unable to retrieve the lost funds.

Is it time to start thinking about personal cyber cover?

Hiscox Personal Cyber Insurance has been specifically designed to meet the needs of customers who want to protect themselves against online threats to personal computer networks, hardware, IT and communication systems. As well as the payment diversion fraud examples above, cover is also provided for additional cyber threats such as theft, extortion and damage to computer hardware, software, and the retrieval of personal data. Amounts covered include up to £50,000 for social engineering and up to £100,000 for extortion if a ransom is demanded following a hack.

Just relying on an existing 606 home insurance policy is no longer enough to protect many individuals and families from external threats which is why Hiscox Personal Cyber insurance can be an important addition to any insurance portfolio.

What you’re covered for if the worst happens

Hacker damage: up to £100,000 cover for repair and replacement of your computer hardware, software and retrieval of personal data.

Cyber theft: up to £50,000 cover for loss of personal funds, personal documents, title deeds, internet data and call charges incurred by the hacker.

Social engineering: up to £50,000 cover for the theft of funds transferred to a fraudulent account following a phishing attack.

Cyber extortion: up to £100,000 cover for a ransom being demanded following a cybercrime.

Cyber media liability: up to £50,000 cover for financial loss, as a result of personal accounts being hacked, and the hackers is found guilty of infringing intellectual property rights, transmitting a computer virus or making libellous/slanderous comments.

Hiscox 606 household policy does not include the above cyber threats and is the reason why customers might choose to add Hiscox Personal Cyber Insurance to their cover.

As ever with insurance, terms vary between carriers. Some cover scenarios others might not. If you require advice on the extent of your existing coverage, please get in touch with your RK Harrison representative.