All of the recent reports of security breaches involving Target and other big-name stores have both consumers and business owners alike concerned about private information. Yet even with the threats, studies have shown that more than half of business owners forego cyber liability insurance. How important is it for businesses to have this type of protection?
Curt Dumbleton, Commercial Insurance Consultant
Widerman & Company, Haddonfield
“Recent breaches of payment card data involving Target, Neiman Marcus and Michaels highlight the importance of protecting customer data. Any business that collects personal data such as credit card records, Social Security numbers, health records and user IDs and passwords has a duty to protect the privacy of this information. Federal and state laws require notification to individuals whose information has been breached; such notifications can be expensive to execute correctly. While the breaches affecting large companies are newsworthy, cyber thieves are increasingly targeting small businesses with less sophisticated security measures. While improved information security is the first line of defense, insurance policies are available to cover the significant financial risk faced by businesses who handle personal data.”
Stephen Ortiz, Partner
Virtua Networks, LLC, Philadelphia
“If you’re an organization that has customer/client data, you have to consider this insurance. The general business insurance policy only covers so-called ‘tangible’ assets, and electronic data is not typically considered tangible. Cyber liability insurance fills that gap, but I would like to take a step back and encourage companies to really look at their overall computer network and server intrusion risks. … Being proactive with a cyber liability policy is the best situation for your company. And don’t think because you’re a small company that it will not happen to you. Traveler’s put out a document stating that ‘40 percent of all breaches have occurred in organizations of 1,000 or fewer employees and 31 percent in organizations of fewer than 100 employees.’”
Published (and copyrighted) in South Jersey Biz, Volume 4, Issue 2 (February, 2014).
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