Escalating threats from digital exposure

Vigilance required to combat ever-emerging risks

News broke of what is currently the biggest collection of stolen digital information to date. As more and more industries and businesses become more information-based, the information value and ease with which it is transmitted creates new risks. Criminals apparently never lack for creative ways to turn stolen data into profits, finding increasingly sophisticated ways to collect personal and proprietary information from corporate networks.

Fallout from stolen information

Failure to adequately protect sensitive information can result not only in lost sales and customers, but in claims and lawsuits for the losses sustained by customers and the general public. Fears about privacy and identity theft have resulted in state and federal legislation regarding the collection, management and protection of sensitive data. These new regulations have had a significant impact on businesses, which now face heavy fines and lawsuits in the event of security failures. Businesses also risk damage to their reputations because of laws requiring require them to publicize such breaches.

Realize the value of your information

Criminals look at corporate websites as gateways to massive information from which they can profit. While businesses spend billions of dollars to strengthen their security, criminals stay one step ahead, developing new methods of attack. Companies spend years, or even decades, gathering data. This data is an extremely valuable asset that must be protected. Businesses can no longer depend on traditional insurance policies to protect against technology risks. Most insurers exclude electronic theft from their standard policy forms. To deal with these risks, businesses need coverages specifically aimed at the inherent risks of our digital economy.

In upcoming articles I will discusses the vulnerable areas that require diligent attention by business owners, tips for improving security, and what the insurance industry is doing to help protect against these ever-evolving risks.

If you would like assistance in assessing coverage to protect your business or have questions regarding your current coverage, please call us at 800-622-7370

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Categories: Breach Of Security, Crime, Loss Control, Risk Management, Theft

Protection Against Cyberbullying

Is denial of coverage a possibility?

As cyberbullying increases, so do the concerns of whether injuries resulting from these harassments or threats will be covered Cyberbullyunder Homeowner or Personal Umbrella policies. Parents are typically not aware of these activities by their children until legal action is taken. Defending against such action can result in the loss of savings, personal effects, and even homes.

The injuries that result from cyberbullying may or may not be covered under a personal insurance policy based on state and individual policy forms. Typical injuries that occur are emotional distress, apprehension, fear, and mental injury, all of which may or may not be considered bodily injury as defined in a Homeowners policy. Bodily injury is usually defined as physical bodily harm such as a broken bone. However, some states define bodily injury to include emotional distress.

Making sure you’re protected

Personal injury liability could provide coverage for allegations of slander, libel, or invasion of privacy, but it’s not automatically included in a Homeowners policy. Purchasing a separate Umbrella policy or adding an endorsement to a Homeowners policy could add this coverage. Also be aware that there is an exclusion for statements that arise out of oral or written publication under the direction of or by an insured with knowledge of its inaccuracy or knowing that the act would violate the rights of others.

The best step you can take to reduce your risk

In the event that emotional distress, anxiety or mental injury is not classified as bodily injury, insureds are not likely to have protection against legal costs under their personal insurance policies. In order to reduce the risk in losing assets, time, expense, and aggravation of legal action arising from cyberbullying, parents should use precautions when their children use electronic devices.

Source: Rough Notes; Donald S. Malecki; July 2012

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Categories: Loss Control, Personal / Advertising Injury, Risk Management