Data Breach Protection Insurance - Macbeths Insurance Brokers

Getting Clear on Privacy Liability and Data Breach Insurance

With so much news around cyber security in the Media, businesses can get confused on how to protect themselves effectively through privacy liability and data breach insurance. With ever more exposure to cyber threats, the question is why wouldn’t you cover the potential costs to defend, manage, respond and help prevent further loss?

Privacy liability and data breach insurance is…

Cover for a breach of individual privacy rights or confidentiality relating to personal information and personally identifiable data, for both customer and employee information held in any format. This includes credit card details and personal healthcare information, as well as the costs a business incurs from third party service provider error, for example, information stored in the cloud.

Do I need privacy liability and data breach insurance?…

A business’ failure to protect sensitive, personal or corporate information can result in a breach of contract, negligence claim or legal liabilities and fines. These can be attached to privacy law violations such as failing to comply with data breach notification laws and PCI compliance.

The legal requirements mean…

At present, the laws in the US are extremely sensitive about this with 46 of the 50 states having mandatory requirements for data breach notification.

Similar to the US, the European Commission plans to introduce new legislation in the near future to unify data protection within the EU under a single law, the General Data Protection Regulation. This will impose certain legal obligations on a company when systems have been breached and data potentially exposed.

Privacy liability and data breach insurance can help with…

With strict rules for dealing with the aftermath of a data breach, the costs of notifying affected users can be extremely high.  The policies businesses consider should include protection for the expenses needed to:

  • Draft official notices (including the printing and postage costs)
  • Cover the costs of an independent security audit, or a forensic investigation into a organisations system to identify the source and scope of the breach
  • Cover the costs to provide a credit monitoring service or an ID theft helpline for the affected third parties

Privacy liability and data breach insurance will mitigate the associated costs of a breach by transferring the risk to the insurance.  When it comes to reputational damage following a breach, we know it’s how a business responds that makes all the difference.  Having the capability to do this effectively and professionally means your business will recover faster, fully.

For further information or advice on this subject, please contact Adam Lawrence on 0118 916 5484.

*Information correct as of 1st May 2016

Author: Adam Lawrence | December 3rd, 2015

Contact the author

Adam Lawrence
Get in touch:   Reading: 0118 916 5480   London: 020 7036 8767