Cyber Liability

From Christy Brown, Personal and Commercial Lines Sales Agent at Brown Insurance:

Among the many great resources I have as an agent are the underwriters and representatives employed by the brokerages and companies we access on behalf of our clients. One such person is Ginny Biondi with CCBSure®, a technology consulting and staffing industry insurance firm, whose office is located on the Eastern Shore of MD. She stopped in for a visit recently and we discussed cyber liability coverage.  I asked if she would be willing to share information on cyber liability with Inside VT KnowledgeWorks readers and she graciously agreed. 

From Ginny Biondi, CCBSure®, on cyber liability:

"Cyber risks are losses and liabilities that a company faces as a result of using the Internet, computer systems and email. Every company handles some type of private or confidential information, such as social security numbers of employees, a customer’s financials, a customer’s credit information or sensitive materials from vendors. Traditional property policies were not intended to protect intangible assets such as intellectual property and data.

Traditional liability policies rely on bodily injury/property damage triggers; there is no coverage for financial loss arising out of a breach of privacy. They typically will not cover damage to third parties’ intangible property.

Many property, liability, and professional liability policies all introduce cyber/virus exclusions. This is where the cyber coverage steps in.  First and third party coverage is available, and coverage offerings can include media liability, network security, damage to your systems, business interruption, electronic theft, threats or extortion and privacy notification. Most of the carriers offering cyber coverage have incorporated crisis management teams as well. The notification process depending on the states involved can be quite extensive and costly. If the insured is a technology company, professional liability can be added as well.

Premium fees depend on risk controls in place, revenue size, and limit requested."

Ginny Biondi and I (Christy Brown) also discussed a particular incident that occurred to me a few years back. I was visiting a storage unit that my employer rented to get some furniture and, by mistake, went to the wrong location. My key unlocked the lock (confirming I was in the right place!) and I went inside to retrieve the property of interest. In reality, I was not in our unit but instead in one rented by a medical office. Of course it was filled with patient files.

Ginny Biondi further comments:

"I would also like to point out that coverage can include physical files of private information as well, such as your example of going into the medical office’s storage facility with your storage company issued key [A clarification from Christy Brown:  The key was not company issued…just a regular master lock key.]; if someone were to take those records, all patients would have to be notified, and this coverage would respond.  It does not have to be done via technology for the coverage to trigger."

Thank you, Christy Brown of Brown Insurance and Ginny Biondi of CCBSure® for this need-to-know information for high-tech entrepreneurs.

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