Cyberbullying Insurance Is for Real. Here’s What it Covers
Traditionally, insurance covers damage to consumers’ homes, cars and health, but in the last several years, more novel policies have arrived on the market covering an ever-growing list of expenses. People today can prevent financial loss due to canceled weddings, withdrawal from college, or even a sick pet. Now, there’s a new insurance product on the block: Cyberbullying protection.
While cyberbullying is relatively common and, in some cases, can result in costly damages, insurance protecting against this growing threat is still a niche product. For monthly premiums starting at around $5, a small but list of companies say they will help victims of cyberbullying recoup expenses from legal fees or psychotherapy costs stemming from online harassment.
But before you rush to buy it, note that experts say this type of coverage may not be for everyone — especially if you are buying it to replace standard online safety practices, or if you already have health insurance that covers mental health care. Here's what to know.
What does cyberbullying protect against?
The Cyberbullying Research Center defines cyberbullying as “willful and repeated harm inflicted through the use of computers, cell phones, and other electronic devices.” In a 2020 survey by the center, 15% of 9- to 12-year olds reported having been cyberbullied at some point in their lives. The center’s 2019 survey, meanwhile, found nearly 37% of 12- to 17-year olds had been cyberbullied in their lifetimes, and just over 17% had been victimized in the last 30 days.
Online rumors and hurtful comments are the most common form of cyberbullying for teens, affecting close to a quarter of cyberbullying targets. More severe bullying, like threats to physical safety or posting mean pictures or racist remarks, touches up to 12% of the teens who said they had been bullied online in the previous 30 days.
Adults are affected, too. Pew data from 2020 found 41% of U.S. adults had experienced some kind of online harassment and about one in 10 experienced more severe forms of online harassment, such as sexual harassment or stalking. Christie Alderman, cyber innovative solutions officer at Chubb, an insurance company that sells cyberbullying insurance, says online harassment from ex-partners is one of the most common scenarios she hears about among adult policyholders.
While many insurance policies cover physical assets, cyberbullying insurance protects against more nebulous threats — lost online data, damaged reputations and emotional fallout caused by harassment. Alderman says Chubb’s cyberbullying policy covers everything from hiring a lawyer for wrongful termination or discipline to expenses related to temporary relocation, private tutoring or increased education expenses in the event of a school transfer. The insurance could even cover fees for public relations help if cyberbullying problems make it into the media.
While these forms of protection could come in handy for rarer, severe cases, emotional damage from online harassment is more common than financial damage. Sameer Hinduja, co-director of the Cyberbullying Research Center and a professor of criminology at Florida Atlantic University, says being cyberbullied has been linked to physical health problems, anxiety, depression and suicidal ideation, and other mental disorders.
So many targets of cyberbullying would benefit from mental health counseling to help them overcome the traumatic experience, Hinduja says. Most cyberbullying insurance policies, including Chubb’s policy, also cover psychiatric care or time away from work or school, but only if problems are observed by a mental health professional.
Before a policy pays out, policyholders need to demonstrate the damages. Chubb policyholders, for example, need to prove two or more related acts of harassment or intimidation on an electronic device that results in measurable damage, like a wrongful termination, false arrest, wrongful discipline, or diagnosed mental anguish that leads to inability to attend school or work for more than a week. You don't have to meet a deductible before Chubb's cyberprotection kicks in.
Where can you buy cyberbullying policies?
Typically, companies that offer homeowners insurance — such as Chubb and Nationwide — are the ones that sell cyber-protection insurance. Insurance startup Waffle also sells cyber protection, though its plans are underwritten by Chubb.
Currently, if you buy a cyberbullying policy through Chubb, it will have to be as an add-on to a homeowners policy. Chubb clients can add its Family Protection plan, which includes cyberbullying coverage as well as coverage for threats like stalking and road rage, or add a specific Cyber Protection plan, which focuses on coverage for cyberbullying and other cyber risks, like a breach of privacy where someone publishes private information online.
Alderman says policies can cost as low as $70 a year, depending on the amount of coverage and a consumer’s location.
Chubb introduced its cyberbullying protection in 2016, leading the charge in personal cyber-insurance. Insurance consultant Dan Weedin, owner of Emerging Risk Solutions, says cyber-insurance in general has been geared toward businesses for the last decade, and that it’s “really picked up steam” in the last four or five years, with more companies investing in policies to protect themselves from cyberattacks like data breaches.
“You’re just now seeing cyber insurance enter into the personal insurance world,” Weedin says. As of 2019, only about 10% of Americans who own devices that connect to the Internet have insurance policies to help them recover from a cyber-attack, according to a 2019 survey by the Insurance Information Institute.
Do you actually need cyberbullying insurance?
Weedin predicts more insurers will start to add general cyber-protection, including cyberbullying, to their personal insurance policies to keep up with competitors.
That said, cyberbullying insurance isn’t something the masses need to start buying right away, even if more companies introduce it, according to Doug Heller, an insurance expert from the Consumer Federation of America.
“There are a lot of very niche products that tend to prey on people’s vague fears of the unknown, but they often don’t pay out much in terms of claims,” he says.
In the case of cyberbullying, Heller says loss ratios, or what an insurance company spends compared to what it earns in premiums, are low. By his estimates, insurance companies pay out about a dollar for every $10 they make on such policies, suggesting either claims or approved payouts are few and far between.
Plus, given that emotional harm is the most likely result of online harassment, cyberbullying coverage may be redundant if you have health insurance that covers mental health care. “If you have healthcare that covers your mental health needs, there’s no exclusion in your policy if those needs derive from cyberbullying,” Heller says.
How stringent insurance companies are in approving claims is one of Hinduja’s primary questions about consumers investing in coverage.
“My concern is how difficult insurance companies make it for targets to prove they have been victimized in a way that triggers coverage,” he says. “If the target previously had a relationship of some kind with the aggressor, does that compromise coverage? If there is no digital evidence, does that compromise coverage?”
While Heller says investing in your family’s online safety is an important concern, he generally recommends precautions to prevent online harassment rather than safety nets.
“There are likely better ways to invest in protecting your family than paying money for insurance coverage that’s very unlikely to be useful,” he says.
As a start, Hinduja recommends enabling privacy settings on social media sites to control what they’re exposed to or who can communicate with them.
“I wouldn’t want the availability of insurance to make society lazy or irresponsible with regard to doing their part to stay safe online,” he says. “While we can’t fully prevent cyberbullying from occurring to ourselves or our children, we do have some agency there.”
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