Claim examples that show the importance of cyber coverage

Claim Description: A box of rental applications with the name, names, addresses and Social Security numbers of 500 individuals was stolen from the office of an apartment complex.

Coverage: Data Compromise

COST: $17,500 for notification, call center and credit monitoring expenses

Claim Description: Identity thieves used credit card skimmers at a gas station to steal credit card numbers from 550 customers. Breach notification laws of 5 states were triggered.

Coverage: Data Compromise

COST: $19,250 for notification, call center and credit monitoring expenses

Claim Description: An employee’s Social Security number was stolen and the thief opened credit cards in his name, charging over $20,000. Having the services and protection from his employer’s Identity Recovery coverage, the employee was able to minimize time away from work and had experts to assist in restoring his credit history and records to pretheft status.

Coverage: Identity Recovery

COST: $5,875 for attorney fees and lost wages

Claim Description: Our insured manufacturer unknowingly sent an email containing a virus to one of their distributors. The distributor’s computer system became infected, causing their website to be down for 2 days. The distributor incurred expenses in having the virus removed and computer system restored, plus loss of income due to their website being down. They sued the manufacturing company when their IT vendor determined that they were the source of the virus. The manufacturer also incurred expenses from hiring an IT firm to remove the virus and restore their system.

Coverage: Computer Attack

COST: $40,000 in third-party expenses incurred by the distributor to have the virus removed and their system restored, plus loss of income. $7,500 in first-party expenses for the manufacturer to hire an IT firm to remove the virus from their system.

Our Agency works with many insurance carriers to offer cyber coverage that addresses several key data security exposures.

This coverage — outlined below — can be quoted on new Businessowners and General Liability policies with some carriers.

• Data Compromise — This endorsement includes both first-party coverage (Response Expense) and third-party coverage (Defense and Liability). Response Expense covers the cost of notifying clients, employees and others affected by a breach of personally identifiable information. Also included is coverage for expenses associated with credit monitoring and identity restoration to help businesses retain their clients’ and employees’ trust and goodwill following a breach. Defense and Liability coverage responds to third-party actions brought against the insured by individuals affected by the breach. (Defense and Liability coverage is not available in N.Y.)

• Identity Recovery — Identity Recovery insurance combines case management services and expense reimbursement coverage for key individuals/owners and employees and their resident family members who become victims of identity theft. This coverage helps to restore their credit history and identity records to pretheft status, regardless of how the theft occurred.

• Computer Attack — Computer Attack coverage protects businesses against damage to electronic data and computer systems from a virus or other computer attack. It also protects a business’s liability to third parties that may have suffered damage due to security weaknesses in the business’s computer system.

* Each claim is handled on the basis of its individual facts and circumstances and in accordance with policy language, including applicable exclusions, conditions and limitations. Insurance overview is for informational purposes only and does not replace or modify the definitions and information contained in individual insurance policies or declaration pages, which are controlling. Terms and availability vary by state and exclusions apply.

Once a Cyber Data Breach occurs, it’s TOO LATE to get coverage! Don’t delay.  Protect your business and your livelihood today!

PLIG is licensed in DE, NJ, and PA.

Shayne Bevilacqua is licensed in AZ, CA, CO, DE, FL, GA, KS, NJ, OK, PA and TX.