With stories of hacker attacks and security breaches flooding the news on a regular basis, we are seeing that even the most trusted companies are falling victim to cyber attacks.
When it comes to cyber security, there is no such thing as being too prepared. All it takes is one cyber attack to have a devastating impact on your community association.
The cost of cyber attack
The financial consequences associated with a cyber attack are extensive and can include any of the following:
- Liability to individuals or companies for their financial loss as a result of the insured’s breach
- Notification costs based on mandated notification laws
- Costs associated with hiring consulting services that specialize in identity theft and crisis management
- Costs associated with investigating how the attack occurred, how much data was taken or compromised, and fixing the deficiencies (if any)
- Costs of ransomware attacks if not properly covered
- Damage to your electronic data and the cost of restoring it
- Damage to your reputation
How to protect your community association
Cyber insurance is an added layer of protection you should incorporate into your community association insurance portfolio.
Employing a full-time staff dedicated to network security is not always feasible for a community association. However, as board member of your association, you have a fiscal duty to your stakeholders.
So how can cyber insurance help? Here are some of the benefits (depending on your provider and specific policy elections, the benefits may vary):
- Limits the amount of liability to third-parties
- Assists with income loss
- Covers civil penalty costs
- Includes legal defense coverage
- Assists with ransomeware coverage
- Assists with extortion coverage
Your partner in crisis management
Consider this scenario. A community association experiences a data breach as a result of their firewall being compromised. Because of the personal data the board stores on residents and prospective buyers, the breach exposes personal identifying information of customers including social security numbers and dates of birth.
Did you know that as a result of the breach, any affected individuals can file for a joint lawsuit against the community association for negligence in implementing sufficient network security measures?
Here’s what you can do to be better prepared for this type of crisis:
- Compose several breach/intrusion and disaster scenarios related to your community association.
- Educate employees on how to recognize phishing and scam emails. Make sure they are aware of the importance of keeping software up to date, strong passwords, and paying close attention to who emails come from.
- Design procedures everyone should follow. Who to call first (board members, law enforcement) and who will be in charge during the crisis.
- Assess the damage or impact of the crisis. Can your community association still operate?
- Live threat assessments are critical to halting a current intrusion. Do you have in-house capabilities or will you need to contact a third-party for assistance?
- After the crisis, you will need to determine if any data was compromised. If any private identifying information was captured, you will need to notify your residents and potential buyers.
- Your reputation will be tarnished after a major crisis. A statement should be prepared in case local media, residents, buyers or service providers have questions.
- Immediately after the crisis has abated, it is important to examine how the intrusion occurred and implement an action plan to deter any future breaches or intrusions.
Cyber insurance assists to provide relief for these unexpected events. The cost of coverage is worth every dollar when facing an impending crisis. If you would like to learn more about Cyber Liability coverage, contact us. We’ll take the time to ask the right questions and we’ll select a reputable insurance carrier to protect you from the unexpected.