Agency Checklists is increasingly asked to look at press releases on new coverages or policies in consideration of writing something about the. In most cases, we pass. Occasionally, however, a coverage announcement comes up on our screens that is indicative, in our opinion, of a new value proposition for insurance. Such is the case with the new Arbella Home Cyber Protection endorsement (“Cyber Endorsement”).
Presently, eight out of ten U.S. consumers have a home wireless or computer network, and more than a third of these connect TVs, gaming consoles and other devices to the Internet. The increase in home networks and devices connected to the Internet with relatively low levels of security creates opportunities for hackers and cyber thieves. Also, the ubiquitousness of digital communication devices of one type or another in everyone’s home or pocket offers cyberbullies and cyberstalkers all too easy access to their victims.
When a home network gets hacked, hit by ransomware, or a family member becomes the target of a cyberstalker or cyberbully, the lost time, monetary costs and emotional costs can quickly mount. Insurance may not solve these problems, but now that it is available, it may help.
A premium of $52.00 for five cyber-related coverages with a $50,000 indemnity limit
Arbella’s Cyber Endorsement, introduced in October, at ten pages reads more like a policy than an endorsement. Arbella offers the Cyber Endorsement on its homeowners, condominium, and rental policies. The provides coverage options of 25,000 and $50,000 in indemnity costs for specified losses, including:
- Cyber Attack
- Cyber Extortion
- Online Fraud
- Data Breach, and
The cost of the coverage is $42 for $25,000 in coverage or $52 for $50,000 in coverage with a $500 deductible
The Cyber Attack coverage pays for the cost of removing a virus or the reprogramming of computers, tablets, wireless routers, and other Internet access points
Cyber Extortion coverage offers professional assistance in responding to a ransomware attack and reimbursement for approved ransom payments.
Online Fraud coverage reimburses the insureds for financial losses including identity theft, phishing schemes, illegal bank or credit card transfers
Data Breach coverage offers a specialized review from a forensic IT or legal representatives as needed along with notification and recovery services if personal data and information entrusted to you is lost, stolen or published.
Finally, the cyberbullying coverage as explained in more detail below pays the costs an individual may incur to stop or avoid cyberbullying attacks, including legal expenses, temporary relocation expenses or private tutoring (for students).
What is unique to Agency Checklists is the cyberbullying-cyberstalking coverage
Cyberbullying coverage in one form or another has been around for several years. However, this coverage has been a high-end product not readily available to the main street homeowner and rental insurance market. As evidenced by the pricing of the endorsement by Arbella, the coverage is available and a bargain.
The Cyber Endorsement focuses on cyberbullying which conjures up the serious problem adolescents and preteens now frequently encounter from their peers or schoolmates abusing them through Facebook posts or any number of messaging or video apps including Instagram, Whatsapp, Kik, Vine, Snapchat and a host of other chat apps.
A 2017 study from the Federal Centers for Disease Control and Prevention found that 14.9% of high school students were electronically bullied in the 12 months before the survey. Serious cyberbullying of an insured’s child can require any number of remedies from technical and legal to changes of environment. All such remedies can cost money.
Cyber Endorsement provides broad coverage for cyberbullying [and cyberstalking] costs
If an insured incurs expenses as a direct result of a “cyberbullying event” (see next section) the coverage will pay up to the policy limits for those costs incurred as:”
- Legal expenses, including legal expenses for the removal of online content related to the “cyberbullying event;”
- Professional cybersecurity consultation services;
- The purchase of mobile applications, social monitoring software, and web-based products when used to prevent further occurrence of “cyberbullying events”;
Also, beyond the reimbursement of costs for technical and legal services the coverage also provides for any insureds’ costs relating to student insureds expenses for:
- Temporary private tutoring;
- Enrollment expenses incurred due to relocation to a similar, alternate school;
The coverage also includes for cyberbullying claims reimbursement for lost wages, and temporary relocation, childcare, and eldercare expenses.
Cyberbullying events under Cyber Endorsement include cyberstalking
The adult version of cyberbullying is cyberstalking. Cyberstalking in Massachusetts can take a number of forms and violate several criminal statutes relating to harassing or threatening electronic communications.
Although the Cyber Endorsement identifies the coverage as applying to “cyberbullying,” the actual insuring agreement is broader for what constitutes an indemnifiable cyberbullying.
The Cyber Endorsement defines a cyberbullying event as:
…two or more similar or related acts of harassment, intimidation, defamation, invasion of privacy, threats of violence or other similar acts. These related acts must be perpetrated, wholly or partially, using computers, cell phones, tablets or any similar device. The “cyberbullying event,” for purposes of this insurance, begins on the date of the first similar or related act of cyberbullying.”
The only requirements to trigger the coverage is that the cyberbullying event is significant enough for [an insured to either] report such “cyberbullying event” to a school administrator, school board or law enforcement; or require treatment by a licensed medical or mental health practitioner who is not a member of [the insured’s] immediate family.
Based on this coverage grant and the conditions for triggering coverage, Agency Checklists can envision scenarios where this coverage would benefit insureds in ways that one would not expect and could not expect before this endorsement became available.
Arbella has partnered with Hartford Steam Boiler to offer the Cyber Endorsement
In 2016, the Hartford Steam Boiler Company, a subsidiary of Munich Re, began offering the first cyber insurance for consumers. The product was offered as a homeowner and rental policy endorsement for insurers to attach to their policies. Arbella appears to be the first of the Massachusetts carriers to partner with the Hartford Steam Boiler to offer this coverage to its insureds.
Since the Hartford Steam Boiler offers this as a personal lines product for any insurers writing homeowners, condominium or renters policy other carriers may offer their own version of the Cyber Endorsement. However, until such carriers roll out their own endorsements, Arbella has the Massachusetts market cornered.
About Arbella Insurance
Founded in 1988 in Quincy Massachusetts, Arbella provides car insurance, home insurance and business insurance in Massachusetts and Connecticut, as well as business insurance in New Hampshire and Rhode Island. Financially strong and customer focused, Arbella has been here in New England for more than 25 years. Arbella endeavors to be the best property and casualty company in the Northeast and seeks new ideas, opportunities, and methods of doing business in striving for excellence and to outperform the industry in every way.