Insurance vs Digital Harm: A Content Analysis of Home and Cyber Insurance Policies in the US and UK

18 Pages Posted: 24 Feb 2024

See all articles by Rachiyta Jain

Rachiyta Jain

University of Edinburgh

Temima Hrle

University of Edinburgh

Daniel W Woods

University of Edinburgh

Date Written: February 19, 2024

Abstract

The adoption of digital technology creates new harms. Given that risk prevention solutions are imperfect, individuals may wish to transfer digital risk to an insurer. It is unclear whether existing insurance policies cover these harms, or whether specialized consumer cyber insurance products are available. We address this research gap by conducting a content analysis of 50 insurance policies, 32 in the US and 18 in the UK. Our analysis of 26 home insurance policies reveals that insurers typically exclude digital perils (losses caused by computer viruses, hacking or cyber attacks), but include coverage for digital assets (devices and downloaded data) impacted by conventional perils. A minority of home insurance policies affirmatively cover digital perils like identity theft and social media defamation. Our analysis of 24 consumer cyber insurance products identifies 6 core perils that are generally covered: cyber attack, data breach, ransomware, online fraud, cyber bullying, and identity theft. Finally, pricing information from 21 policies reveals specialist cyber policies typically cost between $20 and $150. One insurer’s actuarial calculations suggest the expected losses range from $2 (online fraud) to $9 (computer attack). These findings can help users form strategies to manage digital risk.

Keywords: consumer cyber insurance, cyber crime, risk management, ransomware, online fraud, cyber bullying, identity theft

Suggested Citation

Jain, Rachiyta and Hrle, Temima and Woods, Daniel W, Insurance vs Digital Harm: A Content Analysis of Home and Cyber Insurance Policies in the US and UK (February 19, 2024). Available at SSRN: https://ssrn.com/abstract=4731131 or http://dx.doi.org/10.2139/ssrn.4731131

Rachiyta Jain

University of Edinburgh ( email )

Temima Hrle

University of Edinburgh ( email )

Daniel W Woods (Contact Author)

University of Edinburgh ( email )

Edinburgh
United Kingdom

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