Of the many questions I receive when I travel for business or meet with customers, the following is the topic most clients wish to discuss. … “Are data breaches and cyber-security really an issue?” I have heard people remark that cyber-liability is simply another overblown news story, such as Y2K. I have heard it referred to as a  “Chicken Little,” where insurance agencies and carriers are simply running around screaming that the cyber world is falling down.

 I sometimes wish this were the case. I would feel much more secure and rest easier knowing that most customers private data and personal information was under lock and key and can never been accessed by the outside world. But every single day, another retailer, healthcare provider, bank, corporation and company report a comprised customer data system. And many do not report breaches at all, nor do many, even know, that their data has been breached.

 Target, Sony, Ebay, Adobe, Living Social, Ubisoft,  Yahoo, AOL, TJ Maxx, Community Health Systems, The White House and the U.S. Military have all experienced cyber-breaches in the last year. Target has even been taken to court via a class-action suit in order to satisfy their customers

 So let me answer for you FOUR important questions about Cyber-Liability Insurance Coverage:

 1. Who Needs Cyber Liability Coverage?

  • Anyone who has customer data, or handles customer data.  In this case - It is about a loss of data that is not covered under normal Business Owners Policies.
  • ·         Any company or entity that is part of or supports the infrastructure of the United States. (Power, Utilities, Communications, Transportation, etc.)
  • ·         Any company or entity that develops solutions to protect against terrorism. (Such as the Safety Act)
  • ·         Professional services both small and large who have a professional obligation to protect their clients. Examples would be Attorneys, Accountants, Real Estate, Physicians, Mortgage brokers, financial services, and others. 
  • ·         Retail organizations that have customers, in person or online. 
  • ·         Any entity or individual who feels the need to protect their reputation if they are believed or accused of being involved in a loss of customer data

2. I don't sell anything online, do I still need coverage?

 You do not need to be selling online. The Term cyber is not always the right term to understand the exposure and coverage. For example, a "breach" of Data on your PC has nothing to do with selling online.

3. I think I have some coverage under my business package. WRG sells business package policies, and yes there are some new endorsements allowing clients to buy small limits.  You should review your exposure, read the endorsement carefully, and determine if your business should improve its protection.

4. It was expensive last time I looked at the coverage.  A few years ago it was tough to find a good program below $2500 to start now coverage can be found for as low as $500 if your business qualifies.

It costs you nothing to talk to an insurance agency, such as WRG about if Cyber-Liability Insurance Coverage is important to you and your business. I would recommend discussing this policy as soon as possible, but it should definitely be part of the discussion when it is time to review and renew your existing policies.