Posted by Dan Phelan on Wed, Apr 27, 2011 @ 01:19 PM
Recently, Sony has been in the news because of a massive data breach on its PlayStation Network. Initial reports are saying that credit card info for as many as 77 million people worldwide may have been stolen and compromised. In addition to the credit card implications, the hackers also obtained names, birthdays, email addresses, and login/password information from users on the network. At this point, the breach could cost Sony as much as 24 billion, not to mention to serious harm it could do to its PlayStation franchise and trust consumers have in the Sony brand.
It's safe to assume that Sony isn't in a standard insurance program, and will probably end up paying significant amounts of the notification costs for identity theft out of pocket. However, if you store any personal, private data on your website, either password protected or otherwise, you have vulnerabilities that could result in a claim.
Article detailing the Sony databreach
It's also fairly safe to assume that most contractors don't have a website with any personal info about clients, employees, or vendors. And therefore, don't have a significant data breach exposure that would necessitate the need to purchase a cyber liability product. However, as more and more contractors are using social media and learning how to leverage the power of the internet to maximize their sales and marketing dollar, the need to protect your company and information from hackers will become more of a necessity instead of just a "nice to have". The majority of insurance carriers that write contractors have rolled out cyberliability programs in the last year or two and can be added to many general liabilities policies without a significant increase in premium.
Talk to your agent or broker, find out if you have an exposure, and cover your risk appropriately. It's a lot cheaper than dealing with the fallout of a databreach.