Cyber Monday is an excellent opportunity to remind your clients about the importance of adding a cyber liability insurance product to their homeowners coverage.

The pandemic saw homeowners using their homes in new and unusual ways. From learning and working from home full time to budding businesses born out of the economic turndown, every homeowner should be reminded of the exposure behind every online class, Zoom call, startup eBay business or one-person consulting firm.

“As we're working from home and kids are going to school from home, there's so much more online activity and cyber exposure in a household," says Allen Anderson, senior vice president of personal lines, Selective. “I think customers are going to be looking more and more for that type of coverage."

In 2019, Verisk surveyed homeowners about their awareness of cybercrime. Of all their concerns, 43% said they were “extremely concerned" about identity fraud, with 91% admitting that they perform at least one task that could open them up to this exposure. Further, only half of respondents were confident in their ability to detect a cyberattack.

“Cyber insurance is an educational area that we think about for businesses all the time, but I don't know that homeowners always think about it for their home or family," Anderson says.

This year, nearly 93% of people in households with school-age children reported their children engaged in some form of distance learning, according to the U.S. Census Bureau's Household Pulse Survey, which also uncovered that at the end of May—when many school districts across the country are normally in session—80% of people reported that children were using online resources.

Additionally, over half of all adolescents and teens have been bullied online, and over 25% have been bullied repeatedly, according to a study by Chubb. Also noted is the fact that more than half of children bullied do not tell their parents when cyberbullying occurs and 80% of young people think bullying online is easier to get away with than bullying in person.

“Bullying takes place inside and outside of school no matter what," Anderson laments. “If the kids were all in school, the bullying would take place both in the classroom and online, but now it's going to occur almost exclusively online because kids are home."

Many cyber products now include cyberbullying coverage that includes the cost to clean up harmful online material, block future exposures and treat any psychiatric needs of a victim of cyberbullying.

“We have cyberbullying coverage available now as part of our cyber endorsement for homeowners," Anderson adds. “It's a unique exposure at a unique time. A year ago, I don't know that you would have contemplated a situation like this."

One of the defining memories of the pandemic for many Americans is characterized by layoffs or furloughs. While joblessness recovered from 14% in April to 11% in June, nearly 13 million Americans were unemployed in September, 7 million more workers than pre-pandemic levels. Typically, being without a job causes individuals to turn to their own means of finding an income leading to a rise in home-based businesses.

“In-home businesses should also consider adding cyber coverage," says Teresa Scharn, vice president of product development personal lines, Nationwide. “Cyber insurance protects data compromise and is designed to help notify and assist clients and others following a breach of personal identifying information, as well as identity recovery."

Independent agents can prescribe the right coverage. Depending on a client's unique needs, their exposure may require a homeowners endorsement while in some cases a standalone policy might be necessary.

“With everything clients are doing from home, we're recommending they purchase a cyber endorsement," says Joshua Morey, president, J. Morey Company Inc. in Anaheim, California. “But not all carriers will even offer it. And if they do, it's not robust."

More than 4,000 ransomware attacks have occurred every day in the United States since the start of the coronavirus pandemic, according to the FBI. With the cost of a cyberattack claim averaging around $4,000, the trend means that it pays for homeowners to be prepared.

“There are policies that cover up to $15,000 or $20,000 but a more robust policy would cover up to $50,000. That's what we're recommending," Morey says. “The endorsement for these $15,000 policies is cheap—it's like $50 a year or something. However, for the high-valued home carriers, the premium is going to be closer to $1,000 a year."

Will Jones is IA editor-in-chief.

Want to learn more about how the coronavirus pandemic has affected homeowners insurance? Stay tuned for the cover story in the upcoming December issue of Independent Agent.