Cyber Crime Now #3 Insurance Crime: Up From #12 Last Year and Rising…
(According to the Lloyd’s, London Risk Index Survey).
Following HIPAA HITECH legislation and recognizing the seriousness of cyber liability and cyber crime, states are now starting to require some healthcare providers to purchase cyber liability insurance. For example, Illinois and Michigan require non-profit healthcare providers who benefit from state funding to buy cyber liability coverage with minimum $1,000,000 limits. It appears that very soon states will treat the purchase of cyber liability insurance just like auto insurance with a mandatory purchase and mandatory limits.
For YOUR complete “peace of mind”, NASW Assurance Services proactively started to study Cyber insurance risk in 2012, and in July 2014, introduced a line of Cyber Liability solutions that will protect YOU. The Preferra Insurance Company RRG, formerly NASW Risk Retention Group offers a low cost array of Cyber Liability insurance 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.
In September 2014, NASW Assurance Services partnered with Great American Insurance Company* to launch a super-charged multi-tiered comprehensive line of 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 both Cyber Liability programs is usually issued the same day that YOU apply. Call NASW Assurance Services now, 855-835-2160, or check the website for more information, www.naswassurance.org.
Count on your practice being wiped out if YOU are an uninsured victim of cyber breach or even paper records breach. Your third party vendor or mover of 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.
Insurance industry information indicates that on average, a record breach, whether it be paper or digital, costs $200 per client in the practice. So if you have 1,000 clients and one breach occurs, you face on average of $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.
Does YOUR practice or agency accept credit cards? This is just one of many Payment Card Breaches that Cyber Liability insurance protects YOU from.
The BIG 2014 security stories concerning the Target, Neiman Marcus, and Michaels payment card breaches have highlighted the significant criminal hacking and fraudulent payment card activity that occurs. According to the Verizon 2014 PCI Compliance Report, only 11.1% of the organizations it audited between 2011 and 2013 satisfied all 12 PCI requirements.
In other words, just under 90% of the businesses Verizon audited as a PCI Qualified Security Assessor failed. Global card fraud losses have increased from about $3 billion annually in 2000 to about $11 billion annually in 2012 according to the Nilson Report, August 2013. According to the FBI, payment card breaches are low risk (of getting caught) and high reward crimes, and activity in this space will continue to increase as a result.
Here are the key Cyber Liability perils:
- 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 secure YOUR practice 855-835-2160.
*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 November 2014