Is Our Firm Covered if Somebody Hacks Our Files?

Kelan J. Vorbach, CIC

While most professional office policies include coverage to reconstruct paper or electronic records, there are bigger risks they don’t insure. Every day there are stories in the news about a business being hacked or exposing client or personnel information through human error. Most firms don’t process credit cards or collect social security numbers; but, identity thieves can piece together seemingly innocuous information to commit fraud. Privileged and confidential information can be used for cyber extortion.

A data breach can compel the firm to report the incident to government agencies, provide notification and credit monitoring to all victims whose data may have been compromised and the firm may be required to set up a web-site and phone bank to assist those whose identities are at risk. This applies even if the records did not include credit card information or social security numbers. The cost of notification and credit monitoring is about $200 per identity. This cost does not include the firm’s liability for damages based on release of client data.

Though most insurance policies don’t cover what is referred to as data breach, cyber liability or privacy liability; it doesn’t mean you can’t secure coverage for your firm. Policies are now available at a wide variety price points to address the risk of your data falling into the wrong hands.

For more information about the coverage provided by your current policies and options that may be available, talk to your agent or give me a call at 732-223-6611 ext. 108.

Kelan J. Vorbach, CIC is the Professional Liability Program Manager with John B. Wright Insurance. You can check him out at www.LawFirmInsuranceExpert.com.

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