A new option for obtaining cyber insurance is now available to consumers and small-to-midsize businesses (SMBs) who use Internet of Things (IoT) devices to manage their smart homes and businesses. This option is provided through the Pepper IoT Platform-as-a-Service (PaaS) back end, allowing users to opt for a minimum of $10,000 per device in coverage from their service provider without having to go through the usual processes of submitting cyber insurance applications. The insurance can be purchased as an add-on at the time of the sale or later.
Scott Ford, the CEO of Pepper, expressed that consumers currently have few options when it comes to obtaining comprehensive cyber insurance for their IoT devices. Many individuals may not know how to reduce their risk and become better candidates for cyber insurance. By offering a dedicated cyber insurance policy, Pepper provides real and measurable coverage for common cyber threats, rather than just a rider to an existing home policy that might offer nominal coverage.
While the primary target for this partnership is the consumer market, SMBs that use surveillance cameras and similar IoT devices can also benefit from this low-cost cyber insurance alternative.
Toby Coleridge, the chief product officer at Embedded Insurance (EI), the cyber insurance broker for Pepper, emphasizes the simplicity and ease of obtaining a policy through their company. Clients are not required to fill out lengthy applications or go through underwriting. EI’s policies are underwritten by Chubb, the top-ranking cyber insurance carrier in 2023.
The policies offered by EI are real cyber insurance policies designed to be easy to purchase. Unlike corporate cyber insurance policies, which consider an organization’s existing cybersecurity controls, audits, and negotiations, these policies are preconfigured and priced as off-the-shelf packages. Coleridge compares the process to purchasing an automobile policy and highlights that the aim is to keep it as simple as possible.
The coverage options offered by EI include protection against cyber financial fraud, cyber extortion (including ransomware coverage), identity theft, data restoration, device replacement, and cyber bullying. The policies start at $5.28 per month per device and can go up to higher limits, such as coverage up to $100,000 per device, for a higher price.
Coleridge sees personal cyber insurance as a growing market. As social engineering attacks increase against individuals, the need for personal cyber insurance will also increase. The goal is to protect consumers against threats they might be naïve to at present.
The partnership between Pepper and Embedded Insurance is not unique. Other companies in the enterprise space have also announced similar programs. For example, security operations center (SOC) and XDR vendor Arctic Wolf recently partnered with cyber insurance carrier Cysurance to offer cyber insurance to larger enterprises. Arctic Wolf customers can purchase up to $1 million worth of cyber insurance at an 80% discount from standard market rates.
The relationship between security and insurance is a natural one, as shown by State Farm Insurance’s investment in the electronic alarm monitoring security firm ADT and Pepper’s acquisition of Comcast’s business unit Notion. By proactively adding security controls and reducing vulnerabilities, customers can receive better rates from insurance providers.
In conclusion, the partnership between Pepper and Embedded Insurance provides consumers and SMBs using IoT devices with a simple and accessible option for acquiring cyber insurance. As the need for personal cyber insurance grows, this offering fills a significant gap in the market. The relationship between security and insurance continues to strengthen as companies recognize the benefits of proactively reducing vulnerabilities.