Will Cyber Insurance Cover Fraudulent Withdrawals From a Bank Account?

As more and more tasks move online, cyber insurance is becoming more important. But do you need it to bank online, and will it cover fraudulent use of your money?

No, it won’t. Cyber insurance will not cover you in the event your credit card or bank card is stolen and used to make fraudulent withdrawals, even if those withdrawals were via an online banking service.

Cyber insurance is there to protect your data and that of your employees and customers. It does not cover the more traditional instances of fraud.

In this article, we’ll cover these questions:

• Will cyber insurance cover me if my credit card is stolen?
• Do I need cyber insurance if I bank online?
• How can I keep my data safe?

You would be able to claim on your cyber insurance for any data or money stolen as the result of a cyber-attack, but not if your cards were stolen physically or cloned. Contact your bank immediately if you suspect you have been the victim of fraud.

Will cyber insurance cover me if my credit card is stolen?

No. Credit card fraud is identity theft, as the perpetrator is pretending to be you when they use your credit card. Credit card fraud is considered theft, not of money but of identity, as credit card money was never “yours” in the first place. Inform your bank immediately if you think your credit card details have been used fraudulently, as they can cancel your card and make sure your credit amount returns to normal once things have been fixed.

Your cyber insurance will not cover you unless the criminals gained this data via a cyber attack, or by hacking into your network. If the physical cards, or your card details, were stolen from you, this is theft and you must contact your bank. An example of this would be if somebody took your debit or credit card out of your jacket when you weren’t looking.

The only instances considered a cyber crime is if your payment details are leaked from a website, or when someone hacks into your network. The organisation looking after your data needs cyber insurance, and your bank should liaise with them to sort matters out.

Do I need cyber insurance if I bank online?

No, you don’t. If you’re a member of the public who has a bank account you can access via the web, you do not need cyber insurance. This is because your bank holds all your data – as they are the ones who are liable, they should have comprehensive cyber insurance in place.

You only need cyber insurance if you run a business and process data as part of daily operations. For example, your business – no matter its size – will require cyber insurance if it:

• Holds customer, personal or employee data (such as names, addresses and bank details)
• Has a website or uses social media
• Accepts payments via card or makes electronic payments
• Stores data in the cloud or cloud-based services

If you’re a customer of any businesses which operate like this, and only a customer, you won’t need cyber insurance for your day to day tasks around the web. It all depends on if you’re handling the data yourself.

How can I keep my data safe?

It is imperative that you keep your personal information from being stolen. If a thief finds your identifying information, they can take out a loan, withdraw money, create a new bank account or open a new credit card under your name. There is a lot at stake.

This is why it’s good practice to keep all of your personal data secure, especially your credit cards, debit cards, and other financial information. Business’ cyber insurance will take care of most things if there is a leak online – but it’s still best to do as much as you can.

Some important tips to consider are:

• Never keep your PIN number with your credit cards
• Shred bank letters or anything with your credit card number on it
• Avoid giving your credit card to anyone you don’t trust
• Review your credit card statements every month, and raise concerns immediately

A new danger to credit and debit card fraud is “skimming”. This refers to the card being cloned with a special swipe machine. To avoid skimming, keep an eye out for suspicious devices on cash machines, or unfamiliar or suspicious looking card readers.

And of course, if you were behaving negligently, the financial institution who provided your card will not refund any lost money. For example, if you left your credit card out in the open in a public place or gave it to a stranger.

Do you have questions about cyber insurance?

Talk to our cyber insurance experts about the different cover options for cyber insurance and we can advise you of the relevant possibilities for your business.