Computer and Device Theft is Frequent and Growing…
Did you know that in 2014, the FBI reported:
- Over 5,500,000 laptops were stolen in the U.S. in the past 3 years.
- 1 out of 10 laptops are lost or stolen, and the FBI states that left unprotected, only 3% of lost or stolen laptops are recovered.
- 57% of corporate crimes are linked to stolen laptops.
The Ponemon Institute released a study that indicates over 600,000 laptops are lost or stolen in U.S. airports every year, with 65-69% of them remaining unclaimed. According to U.S. News & World Report – Money, Cyber experts say the rapid adoption of smartphones, especially for shopping, which requires the exchange of payment information, leaves many people vulnerable to financial attacks. A 2013 Norton report found that one in three smartphone users have experienced some form of cybercrime.
Theft is a significant threat to users of laptop computers, devices, and even cell phones. Victims of computer device theft can lose hardware, software, and essential data such as client telephone numbers, patient records, and client reports that have not been backed up, and subjecting these victims to HIPAA penalties. Insurance industry information indicates on average, any records breach, whether it is paper or digital, costs $200 per client in a practice. So if you have 1,000 clients and one records information breach occurs, you face on average, $200,000 in costs. These costs are typically split one-third for notification and damage control, and two-thirds to loss of clients and rebuilding systems.
The Computer Security Institute /FBI Computer Crime & Security Survey found the average theft of a laptop to cost a company $31,975. In a study surveying 329 private and public organizations published by Intel in 2010, 7.1% of employee laptops were lost or stolen before the end of their usefulness lifespan. Furthermore, it was determined that the average total negative economic impact of a stolen laptop was $49,256—primarily due to compromised data, and efforts to retroactively protect organizations and people from the potential consequences of that compromised data. The total cost of lost laptops to all organizations involved in the study was estimated at $2.1 billion. Of the $48 Billion lost from the U.S. economy as a result of data breaches, 28% resulted from stolen laptops, cell phones, and other portable devices.
In the 2011, Bureau Brief prepared by the NSW Bureau of Crime Statistics and Research, reported that thefts of laptops have been on the increase over the past 10 years, attributed in part by an increase in ownership, but also because they are an attractive proposition for thieves and opportunists. By 2010, this theft has risen to second most frequent, to cash of all stolen items. The Bureau reports that one in four break-ins during 2010 resulted in a laptop being stolen. This startling trend in burglaries lends itself to an increase proprietary information breach, and in identity theft and fraud due to the personal and financial information commonly found on laptops. According to the survey, victims were most likely to lose a laptop while traveling at hotels, airports, rental cars, and conference events. LoJack for Laptops has compiled a list of the top ten places from which laptops are stolen:
- Public Schools (K-12)
- Residential Properties
- Automobiles (excluding taxis)
- Universities and Colleges
- Restaurants and Cafes
- Hotels and Motels
- Public Transit (taxi, bus, train)
NASW Assurance Services proactively started to study cyber insurance risk in 2012, and beginning in July 2014, introduced a line of cyber liability solutions that will help to protect you. The NASW Risk Retention Group offers a low cost cyber liability insurance cover that is guaranteed issue and fits the budget conscious social worker who still wants some coverage for all of the major cyber liability perils noted below in this article. The NASW Risk Retention Group is working on an additional insurance cover for release in 2015, that contributes to the replacement costs arising from the theft of computer and telephone devices that hold proprietary information, including patient telephone numbers, along with some patient data breach related protection.
In September 2014, NASW Assurance Services partnered with Great American Insurance Company*, founded in 1874, with an A.M. Best rating of A+ (Superior), traded on the NYSE as symbol “AFG”; to launch a super-charged multi-tiered comprehensive line and multi-million dollar limit cyber liability insurance for individuals and agencies starting at about the price of a car insurance policy. This cyber liability insurance is also offered to any size agency practice, including non-profit or for-profit.
Coverage from all of these cyber liability programs is usually issued the same day that you apply.
Call NASW Assurance Services, 855-385-2160, or visit us online at www.naswassurance.org for more information.
Your practice may be wiped out if you are an uninsured victim of computer device theft, cell phone theft, cyber breach, or even a paper records breach. Your third party vendor or mover of your records almost always includes an indemnification in its contract with you that holds them harmless, so you take the responsibility, and you pay all of the liability costs arising from any records information breach.
Here are the key Cyber Liability perils you should know about:
- Notification expenses to third-parties associated with data breach that may be required by state law, GLB, or HIPAA;
- Costs incurred by the company or practice in investigating the breach or security incident that caused the problem, including potential costs for forensic investigations by outside professionals (What happened? How did it happen?);
- Costs associated with data restoration if the security breach resulted in electronic data loss, including applications and data bases;
- Potential costs to protect individuals and patients whose information was compromised for credit monitoring;
- Fines and regulatory actions that are the direct result of the system breach;
- Costs or losses associated with business interruption; and
- Content and advertising injury associated with electronic media.
Contact NASW Assurance Services now to help protect your practice, 855-385-2160, or visit us online at www.naswassurance.org for more information.
*Great American Insurance Company was founded in 1874, trades on the NYSE as symbol “AFG”; and has an A.M. Best rating of A+ (Superior).
Published February 2015