Cyber-Crime is Scary and Expensive

Best Practices – February 09, 2017

Today’s business owners understand the tremendous benefits of using the Internet, computers, and technology in their everyday operations. Unfortunately, all that technology can open the door to some very serious cyber threats. Every business that is “plugged in” is a target for criminals to steal, spy, and cause major disruption.

Cyber threats can be a major blow to a dealership’s financial and operational well-being. They can also expose you to non-criminal risks, such as privacy requirements, damage to technology assets, and liability for damages caused by inadvertent injury to others. These cyber risks can be just as severe as the typical property, liability, business auto, and workers compensation exposures.

Could something like this happen to you?

  • System hack – Hackers install card skimmers onto your business’s payment card system, allowing them to collect debit and credit card numbers for as long as the skimmers remain undiscovered. You must investigate and provide the required notification to the affected individuals, which could number in the hundreds or thousands.
  • Virus infection – A virus infection corrupts data and causes your computer system to stop functioning properly. You lose revenue, and incur the cost of hiring an information technology firm to remove the virus and reinstall your software.

In 2015, the average cost per compromised record was $217.*

Unfortunately, these are just two examples of constantly evolving cyber-attacks that could affect your business—and your finances. Hackers are opportunists. If there’s a hole in your defense against these types of crimes, they’ll take advantage if given the chance. What you do to protect your business from technology disruptions could mean the difference between business as usual, and no business at all.

There are many ways to lessen the financial impact these broad, complex hazards present. When your insurance professional discusses data compromise and cyber coverages with you, ask what options and limits are covered, excluded, or available for your unique exposures.

Search “life hacks” on the Internet and you will get thousands of suggestions for how to do something easier or faster. They are intended to help, not hurt you. Cyber hacks are the complete opposite. If you would like help defending your business against the damage a cyber-criminal could do, Federated Insurance offers data compromise and cyber liability coverage to help you recover in the event of a data breach, and risk management recommendations that can help you block the criminals.

*2015 Cost of Data Breach Study – United States; Ponemon Institute® LLC and IBM®; May 2015; complete report can be found atwww.ibm.com/security/data-breach

Author

Laramie Sandquist, CPCU, ARM
Federated Mutual Insurance Company

This article is for general information and risk prevention only and should not be considered legal or coverage advice. The recommendations presented may help reduce or eliminate the risk of loss but are not guaranteed to do so, and Federated assumes no liability in their use. The terms of your policy will govern. Qualified counsel should be sought with questions specific to your circumstances. © 2017 Federated Mutual Insurance Company. All rights reserved.