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Are You Covered?
  • Calling Home Is Serious Business
    From desktop to tablet to smartphone to printer, digital devices have made business possible anywhere, anytime. And that brings us to a key question from Your Trusted Choice® agent: Has your insurance protection successfully made the same transition?
  • Invasion of Privacy
    In December 2010, Honda joined the list frequented by major financial institutions and retailers, suffering a breach of customer data thought to affect over 2 million Honda owners. Stories such as these send shockwaves through industry, and while they often don’t result in damages, the fear is justified. The mistake most small business owners make is that they assume such breaches are the realm of large companies
  • D&O Insurance:  Protection from Boardroom Liability
    Many people will celebrate the holiday by giving back to their community. Volunteering time or services to a company or non-profit organization may be a selfless act of generosity, but these acts of goodwill can also expose volunteers to possible lawsuits if they are making decisions on behalf of the organizations or company. Fortunately, there is a way to mitigate the exposure to lawsuits and continue lending a hand.
  • Downside of Online:  Cyber Crime & Stolen Data
    What does a cyber crime cost? According to the Ponemon Institute’s First Annual Cost of Cyber Crime Study, published in July 2010, a business can expect to pay an average of $204 per customer record that is lost or stolen.
  • Your Building in Winter
    Winter brings the threat of freezing temperatures and harsh conditions to much of the U.S. Some places are well beyond the threat; it’s going to freeze—there’s no way around it. Such conditions pose unique hazards to commercial building owners. Following is some information on common winter threats and how they are addressed by commercial property insurance.
  • Cyber Attacks: Protecting Your Small Business from Data Theft
    Recently cyber-attacks were back in the news, and the latest attempted victim was the White House. According to an October 1st report from the Washington Post the White House acknowledged that hackers attempted to remove data from a White House computer. While the attempt wasn’t successful thanks to mitigation efforts, the attack should serve as a reminder to all small businesses that they face risks of similar attacks from data thieves, and they may not have the same level of mitigation systems in place.
  • Dependent Properties
    The damage caused by the March 2011 earthquake and tsunami in Japan caught the world by surprise. The devastation was indescribable at the local level. Also shocking were the resulting losses by businesses thousands of miles from the wreckage—losses suffered due to an interrupted supply chain.
  • How much building insurance is enough?
    As a small business owner, you know the importance of preserving your assets. For many business owners, the largest single asset they possess is their building. Whether you occupy the building or operate as a landlord (or both), consider key exposures in your risk-management and insurance planning.
  • Don't Get Robbed Twice!
    One of the often confusing attributes of crime insurance coverages is that the terms used in the insurance policies reflect legal definitions, not the meanings we assume in everyday conversation.
  • Insuring Income: The Lifeblood of Your Business
    If someone asks you if your firm has a catastrophe plan, how would you respond? Would your answer sound something like this: “There’s nothing in writing, however, if something happened that compromised our ability to earn we have a good idea what we would do.”
  • Business interruption insurance
    Would you believe that there is an insurance product specifically designed to help insure a solid, sustainable profit? In fact, without this coverage, hitting your profit targets may become impossible.
  • Where medical fits into liability coverage
    There are two extremely valuable provisions in a solid business insurance policy designed specifically to respond to incidents such as this. The goal of the provisions is twofold:  protect your business from the financial risk of such accidents—legal fees for defense, the potential for large lawsuit awards against you; and try to quickly respond to the pain of the victim in ways that help to avoid lawsuits in the first place.

  • Don’t Let the "Gottas" Determine Your Risk
    As the owner of a small business, you understand better than anyone the meaning of “risk.” The key is to know understand how much risk you can afford, and when or where is the right place to take risk.
  • Don’t Let Your Income Slip When You Do
    Chances are you started your small business with long days and longer nights.  You are fully aware of the truth of the old saying:  'When you are self-employed you work for the toughest boss in the world!"
  • Boom: Understanding Discontinued Operations Coverage
    As a homebuilder, you spent your life making sure the work you did was safe and sufficient. Every year you purchased a commercial general liability (CGL) policy just in case. You made it many years with no claims and want to reward your good work with a much deserved and overdue retirement in where else? Florida.
Downside of Online:  Cyber Crime & Stolen Data
How safe is private information when stored electronically?
 
You may not want to know the answer to that question. But if you’re just a bit curious, consider visiting privacyrights.org/data-breach.
 
The site allows you to scroll through a frequently updated chronological list of reported breaches of private data. Some data are lifted from large companies everyone’s heard of. What’s surprising is how many of the breaches occur at smaller organizations.
 
The information on this site should serve as proof that when it comes to the safety of personal data, businesses big and small must be on alert!
 
While it’s the large breaches that make headlines—think Citigroup or Bank of America—smaller businesses may be at a greater risk. They often lack the infrastructure and resources to protect from cyber criminals. 
 
What does a cyber crime cost? According to the Ponemon Institute’s First Annual Cost of Cyber Crime Study, published in July 2010, a business can expect to pay an average of $204 per customer record that is lost or stolen.

 

Cyber Crime Defined

According to the Ponemon study, the list of cyber crimes is rapidly growing. While many are aware of common cyber crimes, such as identity theft, the list also includes other crimes that can cause damage to a business’s electronic infrastructure. Examples: theft of a business’s intellectual property, the creation/distribution of viruses and malicious code, and the publishing of private data in a public forum online. 
 
Business owners may struggle to keep up with these often-sophisticated threats. Such threats place a tremendous burden on business owners to prevent these losses. Many states have turned to legislation that requires business owners to spend money notifying consumers when a potential breach has occurred.
 
And some such laws go as far as to require the business owner to help pay the cost of the consumer’s data recovery. In March 2010, Massachusetts became the first state to pass comprehensive legislation requiring business owners to take preventative measures to protect data before the loss happens. Failure to do so can result in fines against the business owner.
Business owners in other states also may be impacted by this law, as it’s designed to protect residents of Massachusetts regardless of where the breach occurs. That means your business, even if located in another state, may be subject to fine if your records contain private information on Massachusetts consumers and those records are breached.

 

Protecting Your Firm

There are a number of insurance products available to help business owners to deal with the cost of cyber crime. Policies may address both first and third-party losses.
 
What is a first-party loss? This is a cost the business owners may absorb to cover the firm’s own expenses caused by a cyber crime. Examples may include:
 
-  Notification and credit-monitoring for compromised individuals. (Most states currently have laws in place requiring the business to pay the cost of notifying all consumers that may be victimized by a breach. Most laws require these costs to be paid regardless of whether or not the consumer has suffered financial damages resulting from the breach.)
 
-  Cost to restore data that has been stolen or damaged.
 
-  Lost income resulting from down time caused by a damaged network, lost information or data breach.
 
How about a third-party loss? When a cyber crime occurs against a business, other parties also could be impacted. A third-party loss describes costs that appear when others incur expenses that can be attributed to the cyber crime. Examples may include:
 
-  Defense costs.
 
-  Judgments and settlements for lawsuits brought by customers, employees and other third parties—such as a company claiming its network was damaged by a virus from another infected network.
 
-  Costs associated with fines or penalties imposed by a regulatory body.
 

Why Coverage is Critical

Cyber insurance is designed to protect a business when costs are incurred due to a cyber crime. Business owners should note that common insurance policies such as commercial property, . business income, and general liability often restrict—and in many cases exclude—cyber-related damage.
 
Business owners beware: You should be skeptical of enhancements to such common policies designed to address the cyber exposure. These so-called “cyber enhancements” are often very limited and should not be relied upon without thorough examination of an insurance professional.
 

Final Note

If you’re a business owner, threats to your data come from a variety of sources. Whether you’re the victim of a random hack, disgruntled former or current employee, angry competitor or anyone else, cyber crimes can serious damage your business. Worse, if the crime results in a breach of private consumer data, state law may impose significant fines that could devastate your firm’s bottom line. For more information about insuring against these growing exposures, call your Trusted Choice® independent insurance agent today.  

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Alexandria, VA 22314
Phone: 800.221.7917
Fax: 703.683.7556
Email: Trusted.Choice@iiaba.net