Cyber Security Liability Insurance
General liability insurance may not cover the costs associated with cyber security. The average cost of a single data breach is $204 per lost record. Examples below illustrate situations where such breaches can cost you:
Computer hackers gained access to computerized cash registers of a restaurant and stole credit card information of 5,000 customers, which caused fraudulent purchases around the world.
Theft of Digital Assets
365,000 patient records were exposed when a home healthcare organization had data stolen. Backup tapes, laptops and disks containing social security numbers, clinical and demographic information and some patient financial data were some of those documents stolen. The organization and state attorney general settled providing patients with free credit monitoring, credit restoration to patients that were victims of identity fraud and reimbursement to patients for direct losses that resulted in the data breach. The organization was required to revamp its security policies, implement technical safeguards and conduct random compliance audits.
An employee of a private high school mistakenly distributed names, social security numbers, birthdates and medical information of about 1,250 students and faculty members via email creating a privacy breach.
Cyber Extortion Threat
A US based information technology company was contracted with an overseas software vendor that left universal “administrator” defaults installed on a company’s server. A “hacker for hire” was paid $20,000 to exploit such vulnerability. The hacker advised if the requested payment was not made he would post millions of registered users records on a blog for everyone to see. The extortion expenses and monies are expected to exceed $2,000,000.
A computer worm was released by a juvenile directed infected computers to launch a denial of service attach against a regional computer consulting & application outsourcing firm. The infection caused a 18 hour shutdown of the firms computer systems. It costs the company approximated $875,000 to repair and restore their system as well as interruption expenses.