Of course, you’ve heard of recent “hackers” attacks on large corporations like Anthem Blue Cross, Home Depot, and Target. If you are a small or medium-sized business owner, maybe you are thinking that you might not have as much exposure? According to Travelers Ins. Co. (one of the largest commercial insurers in the United States) “Cyber risk” is definitely on the rise and two-thirds of the claims they have for this type of liability are for small businesses and non-profit organizations. Here are some frequently asked questions about this exhibition:
· What is “cyber liability”? Any personal data you hold about customers, donors, suppliers or employees for the past five years may be at risk. Every name, address, date of birth, social security number, credit card information, health information, and other identifying information is considered “a record.” Each data breach costs approximately $ 214 per record sort out. The average loss is about 20,000 “records”. At $ 214 per record, well, do the math! It is important to understand that your general commercial liability policy (CGL) does not cover web-based activities.
· What costs could my company be responsible for? Some of the main considerations are:
o Notification to clients, donors, etc. Forty-seven states have enacted privacy laws. Each state is different and specific in its requirements for notifying people whose records have been compromised. (The type size and font to be used in the notification letter may be different for each state.)
o Damage to the reputation of the company. You may need to hire a public relations firm to repair and regain the trust in your clients to do business with you.
o Collective lawsuits. Do I need to say more?
o Credit monitoring services. You may need to offer these services for a year for affected individuals.
o Regulatory fines. The government can impose fines for data breaches on certain types of companies.
or “Blog” on the website. Be careful not to defame or defame others.
· Are “hackers” the main concern? “Hacking” offenses are approximately 40% of the cause of data breaches. Significant data loss is due to lost or stolen mobile devices, staff errors, and disgruntled employees.
· My data is backed up in “the cloud”. Do I still have an exhibition? Simply put, your company owns the data. If your cloud provider experiences a data breach related to their companies, your company is responsible for that data.
· What coverage should I make sure I have? Not all contracts that cover cyber risk are the same. Here are some important coverages to make sure they are included:
o Non-electronic data. If an employee disposes of records improperly or paper files are misplaced while traveling, etc., this is extremely important coverage.
o Transmission of a virus. If you send e-mails or electronic newsletters, for example, that contract a virus, you could be responsible for the damage to other computers.
o Loss of income. (Business interruption) Loss of your computer system could shut down your business for an extended period.
o Territory of world coverage. You don’t have to be a large company to have global exposure.
It is best to discuss your situation with a professional independent insurance agent. The collection of personal data is an exposure that all companies should be aware of. All businesses depend on computers, email, and the Internet. Cyber liability insurance is a new cost of doing business.