Nearly every business collects information from their customers. Some of that data is fairly innocuous – names, addresses, email address, etc. However, other information is much more sensitive, such as credit card numbers, social security numbers, birth dates and other personal financial information. In addition, information about new products, patents, trademarks or other intellectual property might be stored on a computer network, the Internet or in printed form. That information, no matter how well secured, has the potential of being stolen and used by cyber-criminals for nefarious purposes. Identity theft and corporate espionage have become so common, the occurrences hardly even attract the media’s attention anymore. Yet, it is estimated that companies in the U.S. spend around $130 billion dealing with the after-affects of a data breach or cyber attack.
When a data breach occurs, the laws in most states require that a business take action immediately, or face possible civil litigation, fines and penalties. In Nevada, NRS 603A defines and regulates the actions of a business in the event of a data breach. The law requires that any business that collects personal information maintain “reasonable” precautions to safeguard this information (or in the case of electronic payment records, compliance with PCI Security Standards, NRS 603A.215). This law requires that a business notify all parties affected of the data breach, which might include all or some of the following:
- Immediate written or electronic notification,
- Notification posting on the company’s website,
- Publication to a major statewide (or nationwide) media outlet.
The potential cost a business to comply with these regulations can be enormous. Factor in lost goodwill and bad press and the results can be devastating to a small business. Fortunately, at Safeguard Insurance we have a solution for business owners large and small. Both Hartford and CNA offer insurance products to cover Data Breach and other Cyber Liability exposures. This coverage is available to practically every type of business including offices, retail stores, manufacturing, wholesale and even technology firms such as website designers, programmers and IT professionals.
Data Breach insurance provides coverage for the following types of expenses:
- Network Security Liability: failure to prevent unauthorized access, transmission of malicious code, failure to prevent identity theft.
- e-Media Liability: claims of wrongful publication, defamation, slander, libel or other tort related to your website.
- Notification Expense: mailing, emailing, publication to comply with State notification laws to all affected parties.
- Crisis Management Expense: to hire the services of a law firm or public relations firm in order to mitigate potential harm to the businesses reputation.
In many cases, Data Breach and Cyber Liability Insurance can be added to your existing policy, or written as stand-alone coverage. The prices are very reasonable – starting around $100 per year. Contact us today for a no-obligation proposal – before the unthinkable happens.