The COVID-19 pandemic changed our world in unexpected ways. For those with high incomes, it revealed significant weaknesses in their insurance coverage that many now wish they had addressed earlier. In addition to ordinary health and life plans, there were underlying risks that only showed up when the crisis hit.
Business Interruption Insurance: The Overlooked Shield
During lockdowns, entrepreneurs and business owners faced unmatched difficulties. Although many had property insurance, they struggled because their business interruption coverage was insufficient. Typical insurance policies usually do not cover pandemics, labeling them as "acts of God," which left businesses without income for extended periods. Take, for example, a luxury hotel chain that had to close due to travel restrictions. Without insurance that included civil authority shutdowns and loss of income, they were unable to pay essential expenses like employee wages, mortgage bills, or upkeep costs. Those who had heavily invested in their companies suddenly realized their hard work was in danger, understanding too late that specialized insurance is crucial for unexpected global issues.
Cyber Insurance: A New Necessity
The pandemic prompted a worldwide shift towards digital reliance, leading to the emergence of complex cyber threats. Wealthy individuals, often feeling secure due to their status, often failed to notice personalized attacks—ranging from AI-driven phishing schemes to vulnerabilities in supply chains. Take, for example, a hedge fund manager whose home internet, left unprotected during remote work, became an entry point for a state-sponsored hacker. This breach led to significant harm, affecting client investments and private equity tactics, resulting in a $12 million loss and attracting investigations from the SEC. Such situations emphasize the role of cyber insurance as both a protective measure and a vital risk management resource in today’s world.
At the same time, family offices managing large estates have become key targets for credential stuffing and infiltrations of Internet of Things (IoT) devices. For instance, a tech entrepreneur’s smart home was compromised through a weak security camera, allowing hackers to access sensitive financial data on a linked server. This incident needed the expertise of forensic cybersecurity experts to dismantle a botnet, incurring $3.5 million in recovery costs—expenses that could have been lessened with coverage for digital forensics and crisis public relations. With cybercriminals increasingly using AI to streamline attacks, cyber insurance is evolving to offer proactive measures like dark web monitoring and breach simulations, shifting from reactive responses to a proactive defense for wealth management in our digital age.
Long-Term Care and Telehealth Supplements
The healthcare system was overwhelmed during the pandemic, putting many high-income middle-aged and elderly individuals in risky situations. Those lacking long-term care insurance had to make tough decisions as hospitals focused on treating COVID-19 patients. Home care options became limited and costly, while nursing homes turned into places with high infection rates. At the same time, telehealth, which was previously overlooked, became vital. High earners without insurance that included telehealth benefits lost out on easy access to specialists, resulting in postponed diagnoses and treatment. They now wish they had chosen policies providing flexible care options during that challenging time.
The pandemic served as a crucial lesson for wealthy individuals. It highlighted that genuine financial safety involves a well-rounded and proactive insurance plan. Don’t allow regrets from the past to linger—assess your coverage, find any weaknesses, and invest in policies that safeguard your financial health, business, and overall well-being in a world filled with uncertainty.
