The frequency and the financially severe impact of data breaches have understandably received a great deal of press. It is widely understood that businesses are responsible for notifying customers or employees if their data is breached by an outside party. But in addition to those particular expenses related to a data breach, service businesses often have another exposure.
Cases have occurred where a laptop is stolen or lost. Worse yet is the scenario where a service firm’s employee is lured into the crime by becoming a “thief for hire”, stealing a client’s laptop and then selling it to a cyber criminal. The cyber criminal, in turn, uses the laptop to hack into your client’s data base and steal the data.
Here is a real shocker: a crime policy – even if it has third party crime coverage – most likely won’t offer you any coverage to pay for damages you or your customer incurred resulting from the breach. The reason is that a standard crime form covers the theft of money, securities or merchandise – yours or your customer’s. It doesn’t include the theft of data.
So what do you do? Check out your own coverage. If you bought a separate data security policy, the coverage may be there but even cyber policies may require some tailoring. If you have not bought one yet, check to see if your crime policy has an endorsement that includes the theft of data from you or your customer.
This type of loss can have severe financial consequences. It takes Risk Control and specialized coverage to prevent or mitigate losses and ultimately, protect your firm. Don’t hesitate to let us know if we can help guide you in the right direction.
Give us a call at 301-948-5800 if you have any questions!