Insurance Claims: — What are my limitations?

Don’t we have insurance that covers the loss of consumer information?

Insurance policies are a necessary evil that trigger after an unfortunate event. Many general liability policies have limited coverage for financial fraud. Cyber insurance, which is quickly becoming popular, is focused on information loss related to technology. However, technology administrators typically have done a good job with hardware and software controls with only 29% of information breaches annually related to computer hackings. The other 71% of institutional risk for information loss or breach is not addressed.

When you have an incident and wish to make a claim, if the practices in question when the information was lost do not reflect the representations made on the application for the insurance, then your claim may not be paid. Furthermore, insurance policies typically don’t account for settlements, fines, penalties, government intervention, and jail time.

It is critical that you take pro-active efforts to protect your organization that complement your insurance programs.

“A defensible position for insurance claims must be derived from establishing and maintaining prudent privacy, security, usage, and notification practices as part of your Identity Theft Prevention Program.”