Safeguarding data is an increasingly complex challenge for large and small businesses alike. Technology reaches throughout business operations, and the volume of electronically stored data grows exponentially. While these trends allow businesses to work more productively, they also result in a greater vulnerability to cyber security threats.
More than 40 states now have some level of data privacy and security breach notification laws on the books. Typically these laws require a business that has suffered a breach to notify all customers who have possibly been affected and may require credit monitoring services. The monetary and reputational costs for notification and credit monitoring are significant.
The inadvertent release of private data can take on many forms, including:
- Lost or stolen laptop containing customer names and social security numbers
- Cyber criminals who hack into your server to steal information
- Disgruntled former employees looking to vandalize stored data
- Private information mistakenly emailed to an incorrect address
- The Ponemon Institute and Symantec have jointly developed a Data Breach Risk Calculator that is an effective tool for evaluating your business exposure to a Cyber Risk loss. Cyber Risk Insurance is available through numerous carriers, with the typical product offering:
- First Party coverage: responds to notification expenses, credit monitoring, remediation expenses, extortion and theft
- Third Party coverage: responds to regulatory defense and litigation from affected individuals
Insurance is not a substitute for sound policies and procedures regarding the handling of private data, but a Cyber Risk policy can help deal with the regulatory, monetary and reputational costs of a data breach. Let us know if you have additional questions regarding these exposures. Additional information can be found at the following websites:
At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.