What You Should Know About Cybersecurity Insurance
Published on: Wednesday, December 9th, 2015
The following blog post contains excerpts from the article Are You Sitting on a Cybersecurity Bombshell? from the September/October issue of JPM. Read the full article for more information on protecting your company from a data breach.
As property management companies collect and maintain more and more data about their residents, tenants, vendors, and clients, the issue of cybersecurity and protecting that data from outside breaches is becoming paramount. Here are a few things you should know about insurance coverage as it relates to cybersecurity:
- The costs of a data breach are typically associated with notification. Liability is rare; a breach doesn’t often cause real harm that would incur a judgment against a property owner.
- Property/casualty insurance policies were never intended to provide coverage for liability and first-party notification expenses resulting from the disclosure of personally identifiable or confidential corporate information.
- Insurance carriers have started adding exclusionary endorsements to ensure that their property/casualty policy language doesn’t provide coverage for these potential claims.
- Many off-the-shelf cyber policies don’t provide coverage for breaches of protected information in paper files, or claims brought by government or regulators, or if a commercial property company fails to encrypt data.
Luckily, there are insurers that can provide coverage for breach or loss of data whether on computer or on paper. The cost of such coverage may be based on the number of records your company has and what systems you have in place to ward off breaches. The policies are also not very expensive; insurance companies are still figuring out how to price them. Typically the policy will require some sort of deductible or retention.
Discuss the possibility of additional cybersecurity insurance for your company with your insurance agent and your IT team to make sure your company is protected. Just like you want to protect your buildings, you also want to protect your company from liability in case of data loss.
For more on the subject of cybersecurity, don’t miss the IREM Executive Edge session “Cyberattacks and Hacking: What You Need to Know about Data Privacy and Security” on Friday, October 23 at 10:00 am. If you won’t be joining us at Executive Edge in Salt Lake City, attend our webinar, What You Need to Know to Protect and Recover from Cyberattacks and Hacking on Tuesday, October 27 at 3pm ET.
About the Author
Karen Kazmierczak is the Digital Strategist at IREM headquarters. She oversees IREM’s digital communications and marketing, including the website, social media, and blog.