Data Breach Liability Protection Highlights

The explosion of electronic data processing and transmittal as a daily part of business has dramatically increased the incidence of identity theft. More than 80 million Americans have had their personal information compromised since February 2005. Over thirty states have passed laws requiring that businesses notify consumers if their personal information in such business’s control has or may have been compromised. Failure to do so can result in severe civil and regulatory penalties, administrative expenses, legal liability and defense costs—and perhaps most costly of all—damage to reputation and loss of customer confidence.

Small and mid-sized companies now have an insurance solution specifically designed to address most of these exposures: Data Breach Liability Insurance plans marketed and sold by Bob Fowinkle, CIC, CLU.

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An Effective Solution for Today’s Identity Theft Epidemic

Our plans offer coverage to a business when its data is compromised resulting in identity theft. Whether the identity theft is the result of negligence occurring anywhere in the world, the policy offers coverage to the business for the following:

• Legal liability damages
• Defense costs
• Regulatory action expense
• Notification costs
• Crisis expenses
• Identity theft recovery services for victims such as education, assistance and credit monitoring

Crisis Management Response

Businesses nationwide are required by law to respond to any unauthorized release of their client’s information. Businesses now recognize that damage to their reputations and the loss of customer loyalty after an unauthorized release becomes public could prove costly. The value of an effective and rapid communications program in the face of such a crisis combined with practical assistance for the victims cannot be underestimated.

Stolen Identity Liability

Businesses are understandably concerned with the civil liability they may face as a result of identity theft based on the unauthorized release of client information. Several lawsuits already have been filed and it is possible that future settlements of these or other lawsuits will make headlines and adversely affect corporate balance sheets.

Administrative Expenses

In an increasingly regulated business environment, any corporate entity that has experienced an unauthorized release of client information may face administrative actions brought by various regulatory bodies, including: the Federal Trade Commission, federal banking agencies and state attorneys’ general.

Protecting Customers and Employees Alike

By providing services for identity theft victims, a business demonstrates its commitment to the needs of consumers. This demonstration of good faith has proved to be a valuable asset in retaining customers, maintaining employee satisfaction and preventing costly actions.