Got insurance? Cyber fraud policies gaining in popularity

UPPER CUMBERLAND – Employee information is stolen. Important data is compromised. A bank account is hacked. If your business is victim to any of the above cyber attacks, are you prepared?

Most are not, according to a recent survey by Chubb, a national property and casualty insurer. An estimated 57 percent of companies do not include cyber liability insurance as part of their plan. And such situations, often times, are not covered on a standard general liability policy.

The Upper Cumberland should take notice, local insurance professionals said, as small businesses are increasingly under attack. According to security software developer Symantec, companies with fewer than 250 employees were the focus of 31 percent of all cyber attacks in 2012 — a jump from 18 percent in 2011.

“Cyber liability is kind of a specialized coverage, but there are a lot of carriers who offer it,” said Chuck Sparks, vice president and agency manager at BB&T-Legge Insurance in Cookeville.

Sparks said cyber liability insurance, which can be written for businesses, government entities or non-profits, has been gaining in popularity for the last six or seven years. And that will likely continue, as more business is driven online – and with greater public awareness following breaches like Target.

“We have seen an increase in that coverage being important to our clients, because the cost can be devastating to a business that doesn’t have it,” he said. “The potential cost to a business if they don’t have it is just as great now as it is insuring your home against fire.”

So who needs it exactly? If you accept online payments or make payments online – either personally or through a business – it’s highly recommended. If narrowing the scope, Steve Copeland at Cumberland Insurance Agency in Cookeville said, medical facilities, car dealerships, banks, credit unions, etc., are all high priorities.

Premiums vary greatly, but Copeland said a quality policy would likely cost a minimum of $1,500 annually. CIA most commonly offers data breach coverage.

“Every business is different,” Copeland said. “We offer it, and we tell them what it covers, show them the risk they have, and then they make their decision based on where their data is stored and who’s got control. We try to offer it to every customer,” he added, “but at the same time, some are more susceptible to breaches than others.”

BB&T also offers identity theft coverage, which is optional on a homeowner’s policy, but, Sparks said, “We don’t sell one without it.” Even if the customer’s not thinking about it, we’re thinking about it,” he said. “There are full-time criminals all over the world, where this is all they do, figuring out a way into your system. Every time you open the paper anymore, there’s another situation where credit card numbers or Social Security numbers have been compromised. And it’s not going to go away.”

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