Data risk: Are you insuring what you should? Are you sure?

January 8, 2016 | Iowa Caucuses: Top issues facing businesses Juli Jenkins, LMC Insurance & Risk Management,

Companies have insurance for all kinds of liability, from fires to workers’ compensation, but what about a data breach?

The average policy does not include coverage for data risk or cyber liability. Fires cost U.S. businesses $3 billion in 2014, while data breaches cost over $40 billion (more than 10 times as much as fires). Over 78 percent of small to medium-sized businesses experienced a cyber attack in 2014. Are you a member of lucky 22 percent?

Consider this: Half of all attacks are targeted at business with fewer than 500 employees.

The cost for small businesses can be enormous. More than 95 percent of all businesses have insurance for fire, but fewer than 40 percent have cyber/data breach insurance.

Here are two coverage options to consider:
1st Party Coverage: This includes forensic investigation, notification expense, credit monitoring expense and crisis management, including public relations consultants.

3rd Party Coverage: This includes disclosure injury, social media exposures, intellectual property infringement and reputational injury.

LMC has direct access to almost all of the markets for data risk coverage. Those carriers that LMC does not have direct access to can be accessed through our extensive broker relationships.

LMC has partnered with a company that can offer information technology and network security risk management consulting services that specialize in finding issues in your network before there is a problem.