What Just Happened? We Have Insurance Coverage… Right?
by Tom Franzen, CIC, ARM, ARM-P
In my last article, we discussed property exposures. Now, let’s focus on something new, unpredictable, and hard to plan for: will it lead to property damage, third-party liability, or both? Will it affect our company鈥檚 reputation with customers and vendors? How did it happen, and who鈥檚 responsible?
We鈥檝e covered insurance to value, setting general liability, auto limits, and adding umbrella coverage. We can buy workers’ comp, crime, and D&O insurance, and feel secure. But this exposure is like a ghost鈥攊t comes and goes, leaving us wondering, 鈥淲hat just happened?鈥
If you guessed cyber liability, you’re spot on. If you have a device connected to the internet, you鈥檙e exposed鈥攁nd the risk could be much larger than you imagine.
Large businesses like retailers, manufacturers, and financial institutions have all been victims of cybercrime, but small businesses and individuals aren鈥檛 safe either. All 50 states, the federal government, and many foreign countries have cyber liability reporting requirements. Could you be required to report? And, what about your customers? Are they required to report?
Cyber incidents are happening more frequently and with greater impact. Someone in your organization opens the wrong email, your systems go down, and your financial data is encrypted. They demand a ransom. Do they have access to your bank accounts? HR says they might have employee info. Now you鈥檙e asking, 鈥淲hat just happened?鈥 and “What do we do now?”
For property, liability, and workers’ comp losses, you call the insurance company. But now you’re wondering: Do we have cyber coverage? Are our limits high enough? Do we have coverage for fines and penalties? Heck, is our own data even covered?
Cyber threats are real and can come from anywhere. And while you handle all this, your business still needs to run!
If you have any questions, contact Tom at Tom.F.Franzen@gmail.com. Tom Franzen is the retained Insurance/Risk Management Consultant for FEMA Services, Inc. Franzen has 45 years’ experience on both the company and agency sides of the business.