One issue which we have spoken about before has returned; the threat to our agencies posed by cyber attacks and the liability it brings to both our agencies, and the threat to our customers. The RPS website shares some very scary data about this threat. According to a survey conducted by Hartford Steam Boiler, 53% of firms experienced some sort of cyber attack in the past year. Of those hacked, 72% spent over $5,000 to investigate, restore, or replace software or hardware. 7% spent more than a quarter of a million dollars! As you can see, this is a large-scale problem with potential large-scale penalties.
According to reports, New York is enacting new regulations that make it the responsibility of the agent/broker to secure coverage to protect their clients in the event of a data breach. Couple this with the fact that the National Association of Insurance Commissioners has asked for the regulating language to adopt similar legislation in the other states and one can readily see where this action will take us. There is at least one major carrier that already requires this protection to maintain a contract with them.
While writing this I contacted the WV Insurance for guidance on what we can expect. Commissioner McVey responded that “Although there are no current laws regarding the requirement to have Cyber coverages we do review the risk associated with those exposures and will be introducing this law at some point to our Legislature. It would include an assessment on how they would handle a breach (insurance, self-insurance deposits, etc.)…I think it is a huge risk for all of us.” CLICK HERE to see the press release from the NAIC.
If you do not have a cyber liability policy in place already, it is important to get one and will soon be mandatory. Please check the RPS website for further information or contact us a MSAA for more information. Quotes for VERY broad coverage are $400 for most agencies.