Having proper insurance coverage is vital in any risk management plan. In today’s world being covered for fire, theft, internal fraud, business interruption and general liability is not enough because one of the major causes for losses is cyber theft. Some businesses and nonprofits are more reliant on their computer sites than others but all need to think about purchasing a cyber insurance policy to cover any losses due to illegal entry in your systems. It is not enough to say I have a protection service as today’s thieves are quite sophisticated and know how to penetrate most of these. Evidence of this is the hacking of government sites and the largest retail chains.
If you buy a policy be sure that it includes coverage not just for a direct hacking event but includes coverage for a “voluntary parting” wherein the insured is induced into sending out information or funds by a fraudulent scheme, trick or false pretense. Some insurance companies have exclusions for these types of actions which negates one of the reasons for the purchase. There are many other gray areas when it comes to cyber insurance coverage which is why it is so important to understand coverage limits, and sub limits that may exist.
Because there are so many variables you might seek out a broker familiar with these new types of policies and is current with the ever changing dynamics of this form of protection. Cyber attacks are not going away so protect your nonprofit accordingly.
Author: Dave Blankenhorn, Executive Coaches of Orange County, www.ECofOC.org