Cyber Insurance and Online Fraud: How Individuals and Businesses Can Protect Themselves

1. What Is Cyber Insurance and Why Does It Matter?

Online transactions, online shopping, digital banking, and storing files on the internet have made our daily lives easier. At the same time, however, they have created new risks for individuals, self-employed professionals, and businesses.

A compromised online account, a fraudulent transaction, or an attack on corporate systems can lead to financial losses, data loss, business interruption, and the exposure of personal information.

Cyber insurance is a form of insurance protection that may cover specific financial consequences of cyber incidents. Depending on the plan, it may be designed for individuals or tailored specifically to businesses.

However, cyber insurance should not be confused with cyberattack prevention. Insurance may help address certain financial consequences, but it does not prevent an attack on its own or guarantee compensation for every incident of online fraud.

2. What Are the Most Common Types of Online Fraud?

Cyber risks do not affect only large companies or people who carry out frequent online transactions. They can affect anyone who uses digital services.

Phishing: Fraudulent Messages and Websites

A user receives an email, SMS, or message that appears to come from a bank, courier company, public authority, or well-known platform. The message encourages them to click a link and enter passwords, card details, or other personal information.

Fraudsters may use this information to access accounts or attempt unauthorized transactions.

Account and Identity Theft

Stolen passwords or personal information may allow third parties to access email accounts, social media profiles, online services, or other accounts.

In some cases, this information is used for impersonation, deceiving other people, or attempting financial exploitation.

Online Transaction Fraud

Examples include fake classified ads, fraudulent online stores, counterfeit payment notifications, and misleading instructions to transfer money.

Not all these situations are necessarily covered by a cyber insurance policy. Coverage depends on the precise definition of an insured event and the terms of the contract.

Ransomware: Extortion Through Digital Systems

In a ransomware attack, malicious software may encrypt files or prevent access to a company's systems. The attackers may demand money to restore access or threaten to publish data.

The consequences may include technical recovery costs, data loss, and business interruption.

Business Communication Impersonation Fraud

In businesses, fraudsters may impersonate a supplier, business partner, or executive and request payment of an invoice to a different bank account.

This type of fraud, known as Business Email Compromise (BEC), can cause significant financial losses, even when the banking system itself has not been directly compromised.

3. What Can Cyber Insurance Cover for Individuals?

Policies for individuals vary considerably. Some may provide assistance for specific incidents involving digital fraud, personal data breaches, or identity theft.

Depending on the product, coverage may include:

• Technical support: Assistance with addressing a compromised account or device.
• Identity recovery support: Guidance on dealing with the misuse of personal information.
• Legal support: Advice or coverage for specific legal expenses, where provided for in the policy.
• Certain financial losses from online fraud: Only when the specific incident is expressly included in the coverage.
• Post-incident assistance: Guidance on protecting accounts and personal information.

Pay particular attention when a plan is broadly advertised as offering protection against “online fraud.” This does not mean that it compensates every loss of money involving cards, bank transfers, purchases, or investment scams.

Before choosing a policy, it is important to examine exactly which acts and incidents are covered, which are excluded, and what conditions must be met.

4. How Can a Business Be Protected Against Cyberattacks?

Even a few hours of downtime can have financial consequences for a business. Losing access to customer files, booking systems, invoicing software, or online orders can directly affect revenue and reputation.

Depending on the plan, business cyber insurance may include the following types of coverage.

Incident Response Expenses

Within the agreed limits, coverage may include IT specialists, incident investigations, and measures to contain the damage.

Data and System Recovery

Some policies cover the costs of recovering data or restoring systems following a covered incident.

Recovery is not guaranteed. Backups remain essential, even when insurance protection is in place.

Business Interruption

Where this coverage is included, the policy may compensate certain financial losses resulting from the interruption or restriction of operations caused by a covered cyber incident.

Check the waiting period, the duration of compensation, how the loss is calculated, and any specific restrictions.

Third-Party Liability

If a data breach leads to claims by third parties, certain legal expenses or liabilities may be covered, subject to the policy terms and applicable law.

Data Notification and Incident Management Expenses

In incidents involving personal data, some plans may cover the costs of notifying affected individuals, advisory services, or crisis management support.

Cyber Extortion

Some policies include specialized services for responding to extortion incidents. Coverage for ransom demands or related expenses is subject to specific terms, exclusions, and restrictions, as well as applicable law.

You should not assume that a policy covers ransom payments or every type of cyber extortion demand.

5. What May Be Excluded from Insurance Coverage?

One of the most important steps before purchasing a policy is to read its exclusions. Terms vary by insurer and plan, but restrictions may apply to:

• Fraud or money transfers that are not expressly included in the coverage.
• Intentional acts by the insured or cases involving the insured's participation in fraud.
• Incidents that had already occurred or were known before the policy began.
• Losses associated with failure to comply with specific security requirements.
• Certain acts of war, state-sponsored cyberattacks, or other specifically excluded events.
• Fines or penalties that are not insurable under applicable law.
• Losses exceeding the coverage limits or falling below the agreed deductible.

In addition, you may be required to report an incident to the insurance company promptly and use approved service providers for specific recovery measures.

Important: Do not assume that having an insurance policy automatically guarantees compensation. The insurer assesses the incident and applies the policy's terms, limits, and exclusions.

6. What Should You Do Immediately After Online Fraud?

The speed of your response can be crucial, particularly if transactions have taken place or an account may have been compromised.

Step 1: Contact Your Bank Immediately

If you discover an unfamiliar transaction or suspect that your card details have been stolen, contact your bank through its official channels.

Depending on the circumstances, request that the card or account be blocked, ask for the transactions to be reviewed, and obtain instructions on submitting a dispute. Do not wait until you have completed all other steps before contacting the bank.

Whether money can be recovered depends on the nature of the transaction, the circumstances, and the applicable framework. Not every payment resulting from deception is automatically refundable.

Step 2: Change Your Passwords

If you suspect a compromise, change the relevant passwords using a device you believe is secure. Prioritize your email account, as it is often used to recover access to other accounts.

Enable multifactor authentication (MFA) wherever available, and sign out of any unfamiliar active sessions.

Step 3: Preserve the Evidence

Keep messages, emails, links, transaction receipts, reference numbers, and screenshots. Do not delete information that may be needed by your bank, insurer, or the relevant authorities.

Step 4: Notify the Relevant Authorities

Depending on the incident, you can contact the Hellenic Police and the relevant cybercrime authorities. Follow the official reporting procedures and keep the reference number, if one is provided.

Step 5: Notify Your Insurance Company

If you have a relevant policy, follow the claims notification procedure set out in the contract. Ask which supporting documents are required, what deadlines apply, and which recovery measures are permitted.

Do not delay contacting your bank or the authorities while waiting for a response from your insurer.

Beware of follow-up scams: After an incident, you may be approached by people promising to recover your lost money in exchange for a fee. Do not share passwords, card details, or verification codes with strangers, and do not pay for recovery services without verifying their legitimacy.

7. Which Preventive Measures Can Reduce the Risk?

Insurance protection works best when combined with basic digital security measures.

For individuals:

• Use unique, strong passwords and a reputable password manager.
• Enable multifactor authentication.
• Carefully check links and sender details before entering personal information.
• Regularly update your operating system and applications.
• Enable banking transaction alerts.
• Never share one-time passwords or login credentials.

For businesses:

• Maintain regular backups and test that they can be restored.
• Restrict employees' access to only the data they genuinely need.
• Use multifactor authentication for critical systems and business accounts.
• Keep software, operating systems, and network devices up to date.
• Train staff to recognize phishing and fraudulent payment requests.
• Verify requests to change a supplier's bank account through an independent, previously established communication channel.
• Develop a cyber incident response plan and designate responsible contacts.

Prevention reduces the likelihood and potential impact of a loss, but it cannot eliminate every risk.

8. How Do You Choose the Right Policy?

Before choosing a cyber insurance plan, assess your actual needs rather than focusing solely on the premium.

For an individual, key questions include whether the policy covers identity theft, account compromise, online transactions, and technical or legal support expenses.

For a business, the assessment should take into account the volume and type of data it manages, its dependence on digital systems, its transactions, potential business interruption, and its liabilities to customers and business partners.

Before signing, check the following:

1. Exact coverage: Which incidents are insured, and which are not?
2. Compensation limits: What is the maximum payout per incident and in total?
3. Deductibles: What portion of the loss must you pay yourself?
4. Security requirements: Are specific protective measures mandatory?
5. Incident reporting procedure: Whom must you notify, and within what time frame?
6. Exclusions and sublimits: Are there special restrictions for money transfers, ransomware, or business interruption?
7. Support services: Is a helpline available, or can you access specialized service providers following an incident?

Businesses that handle personal data should also consider their compliance with relevant legal obligations. Insurance coverage does not replace data protection responsibilities or guarantee that fines or penalties will be covered.

9. Is Cyber Insurance Necessary for Everyone?

There is no single answer that applies to every situation.

An individual who frequently makes online transactions may be interested in personal data protection and assistance following an account breach. A small business serving customers online may need broader coverage because a single incident could simultaneously affect its operations, data, and reputation.

The decision should be based on exposure to risk, potential financial consequences, the cost of insurance, and the coverage actually offered.

It is also useful to check whether certain risks are already covered by other insurance products. However, you should not assume that a general home, professional liability, or property insurance policy automatically includes cyber risks.

10. Conclusion: Prevention, Awareness, and the Right Insurance Choice

Online fraud and cyberattacks pose real risks to personal and business financial security. Managing these risks effectively requires a combination of careful technology use, technical security measures, and, where appropriate, specialized insurance coverage.

Before choosing a policy, make sure you understand exactly what it covers, which exclusions apply, and what obligations you have in the event of a loss. An informed choice can help you manage digital risks more effectively without creating the false impression that every loss will be compensated.

At Globy+, our goal is to help you understand the available protection options and assess your needs in light of your personal or business circumstances.

Important clarification: This article is for general informational purposes only. Policy terms, the scope of coverage, and the conditions for compensation are determined by the individual insurance contract and applicable law. For a specific incident, contact your bank, the relevant authorities, and, if you have a policy, your insurance company.