From the Desk of Des

Over the years, I have had many experiences in regards to assisting our clients in their risk assessment analysis and how to best protect their business and personal interests. As time passes and the marketplace evolves so do the risks and the assessment and methods used to protect our assets. With that thought in mind, I feel very strongly about alerting our clients to the topic of Cyber Liability.

Network Security and Privacy Liability (Cyber Liability) is a constantly evolving risk for every business today.  Most of us have all known of someone involved in a cyber breach or have experienced it for ourselves (i.e. The Target Breach in March of 2014). Even during the Home Depot Inc.’s data breach, we received in our office a “junk email” claiming to be American Express and speaking of an unauthorized charge to Home Depot and asking for you to follow a link to correct the problem. The sophisticated web user knows this to be a “phishing” expedition and not to fall into the hacker’s trap. You should hit the “Delete” button immediately! How many though are not so Internet savvy? Could it be one of your employees? Luckily, my employee at the time knew better. However, what if they did not or perhaps it was just one of those days where someone or perhaps myself, was not thinking clearly before clicking where they should not. Disaster!

If this incident were to occur in your office, the breach of security for your firm could be costly. States are reacting swiftly to data breach issues with sweeping legislation affecting almost all businesses. Recently enacted laws require notification to all customers affected by a breach, whether or not their information has been used maliciously. In most cases, the notification also requires an option of one year credit monitoring services and a new card or account number for customers. Costs can be as much as $250 for each individual affected by the breach and the average is around $188 per individual. Most people think the cost of a cyber breach is limited to these notification and credit monitoring expenses. There are other areas of consideration; such as, business interruption (this type of loss would not be covered under a standard business interruption coverage policy), security overhauls, customer concessions (discounts or promotions to win back customer loyalty), and even possibly causing a “shut down” of your company from the enormous expense. When you start adding in all these factors together the result is a lot more than any of us want to realize.

Any business that obtains and/or maintains any form of personal information of their customers or employees (whether in electronic or paper/non-electronic format) has cyber exposure and is at risk. Standard General Liability products and even Crime Liability do not normally cover cyber liability exposures. Some companies may have a supplement which usually is insufficient coverage for this type of loss. This is a concern I have for each of our clients as I feel a personal responsibility to give them the most complete analysis I and my team can give them regarding their risk assessment needs.

All of us wish never to be faced with this type of exposure but we must be prepared to deal with it.

Stay ahead of the game and don’t let a hacker get to your most valuable assets, your clients! Click here to read more about Minimizing Cyber Exposure.  Meanwhile, stay prepared with Cyber Liability Insurance

– Des

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