Cyber liability insurance isn’t just for information technology companies. Nearly every class of business should have it if they don’t already. Many businesses including banks, restaurants, retailers, and medical offices are unaware of the security technology exposure they face.
The Internet is not the source of all data breach problems. Commonplace lower tech breaches are caused by leaving password notes out in plain view, theft of laptops, and improper disposal of medical records.
Recent state laws require companies that have experienced a security breach to notify all customers who could be affected by the breach that their information has been compromised. In most cases, the notification also includes one year of free credit monitoring services and a new card or account number for customers.
More than 40 states have data breach notification laws and insurers expect passage of a federal cyber notification law some time in the near future. The average per customer cost for a security breach is $15, which doesn’t include loss of reputation.
Source: Amy O’Conner. “Security Breach Notification Laws Reinforce Need for Cyber Insurance.” mynewmarkeets.com. 03 March 2010.