As a business owner, it’s possible you make decisions every day that can come back to bite you. You may not think so, but in this day of litigiousness, your business may be at risk. A type of Business Insurance to manage your risk is management liability insurance. Depending on your business, in addition to having General Liability Insurance, having Professional Liability Insurance is not just good business, it is as necessary as heat and lighting for your office. Statutes, federal, and state laws change on a regular basis, so it is important that your company protect its assets with management or professional liability insurance. For example, if you are an Engineer, Certified Public Accountant (CPA), or in any type of field giving advice or service, you should consider professional liability insurance for your business. Some things to Consider
General Liability Insurance does not cover the risks of Employment Liability, Professional Liability, or Directors and Officers Liability. You need a separate insurance policy to cover these risks.
Defense costs are going up at a rapid rate. Management liability insurance can provide needed defense coverage, even if you are not liable (yes, even if you are not held liable). You still have to go to court.
Company owners can be held personally liable for their actions as well as the actions of other managers or executives. It is imperative to put coverage in place for protection.
Twenty five percent of private firms have had some sort of employment issue that could not be resolved without legal counsel involvement. The average defense costs are $250 per hour. These costs can add up. You also have to consider finding the right law firm, which can take time.
Many businesses fail to purchase Cyber Insurance. According to Adam Hewitt, senior vice president of INSUREtrust, “Cyber risk is the fastest-growing segment in the commercial liability insurance industry -- increasing at an annual rate of 30 percent”. The average cost of each compromised record is around $175.00. Most states have laws requiring notification if you have had an incident. If you are collecting personal data, it is your responsibility. The judge/court probably isn’t going to want to hear, it’s stored in the cloud.
If you have any questions about management liability insurance or any other type of Business Insurance, please let me know. We are located in Austin, TX and would be happy to meet with you to answer any questions and provide you with a quote. Once you have had a chance to review coverage and pricing, then you can make an informed decision.
I'm sure you have heard about a Data Breach in the news at some point in time. Usually the media just tells about the large companies that have been impacted. For example, Experian and T-Mobile have made the news recently. Since we only hear about the large companies being attacked, I'm sure most small businesses think it cannot happen to them or the impact isn't that big. The reality is you don't have to be a Home Depot, T-Mobile or Target to be a victim of a Data Breach as most cyber attacks are small to medium sized businesses. According to an industry expert, 62% of all Cyber attacks are on small to medium sized businesses. Now to get back to the question, what is a Data Breach? It is private data that is viewed, used, held for ransom, or stolen by an unauthorized person. Who would have thought 10 years ago we would be worried about someone taking our data and holding it ransom.
Let's review some facts:
Data breaches and cyber attacks have increased another 23 percent in the last year
25 percent of all breaches have occurred in organizations of 2,500 or fewer employees
The average cost of a data breach has risen to $6.53 million (this includes costs related to loss)
Costs associated with that breach average $217 per compromised record.
As you can imagine, it's a little more complex than a phone call to your IT guy or gal. The most important thing at stake for a small to medium sized business when it comes to a data breach is not only their business, but their reputation. These large corporations have huge public relations firms to come to their aide, and when it comes to defense from a lawyer, money is no object. Worst case scenario their stock might drop a few points. But again, the PR firm is going to make a statement and put everyone at ease. Another thing these large companies have is a trusted brand, which can go a long way when an attack occurs. A small to medium sized business probably does not have the luxury of any of these. One small breach could cause their livelihood to crumble and never recover. Fortunately, there are options. The first option is to do nothing and have the mentality that it won't happen to you. The second option is a solution.
When it comes to Business Insurance, business owners need to be thinking about more than just General Liability, Umbrella, and Property Insurance to protect their business. Since we live in this digital age now, Data Breach Coverage should be considered by all business owners. The amount of coverage is going to depend on your level risk and your business. Here's some basic coverage information you should look for when it comes to Data Breach:
Breach notification expense
Credit card monitoring services
Cost to retain a public relations consultant
Access to a Breach Coach
These are just a few things to look for when considering a Cyber Liability policy. Here's a fantastic checklist to review. Bottom line, a stolen laptop, smart phone, a stolen record or a virus can have an enormous impact on a business. There are many options when looking at Data Breach coverage for your business. It can be very confusing and overwhelming, if I can help, please let me know.
October is Cyber Awareness Month so it's only fitting we get you information on basic prevention. We don't want to overwhelm people, so we're going to keep this simple. Your password can be your first line of defense against attack. Below are some password tips that you should follow.
Make sure your passwords are cryptic. An example would be 2_DerWiL9. It's important your password is something you can remember, though.
Change your password. Sometimes websites make it a requirement to update your password every year or so. If they do not, it's generally a good idea to do anyway.
Do not use the same password for all your accounts. Of course it is easier, but that also means it's going to be much easier to hack all your accounts once one is compromised.
Never share your passwords or write them down.
This is just one basic tip. Take the time today to update your passwords and learn more about Cyber Liability. For more information on Cyber Liability and Data Breach, please free to contact me. I am always here to help.
NOTICE: This blog and website are made available by the publisher for informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.