Over the past two and a half years, there have been over 225 million reported consumer data breaches. This year alone, there have been more than 30 million reported security breaches of consumer data. No one knows the actual numbers since it is suspected that most security breaches are unreported.
Most tech firms and regular businesses with exposure don’t have insurance to cover this exensive peril. Liability for the following categories of expenses are common in these breaches of security:
*Class action lawsuits
*Regulatory fines, fees, penalties
*Statutory notification expenses
Tech companies that collect confidential information or assist clients that do the same must make sure that their Professional Liability / Errors & Omissions policy is specially endorsed to respond to breach of security lawsuits. Non tech companies with exposure must make sure that their Cyber Liability policy does the same.
Source: S.H. Smith & Company, Inc. E Bulletin, 10-19-08
