Security breaches are not limited to Web-based businesses, financial institutions and medical firms; they can affect your company, too. Does your company handle private or confidential data, such as the Social Security numbers of your employees or the credit card information of your customers? If you answered yes, then the mishandling of this type of information can cost your business millions of dollars.

According to a study by the Ponemon Institute, U.S. companies incurred an average cost of $14 million per computer breach incident in 2005. For some businesses, the cost was as much as $50 million per incident.

Your company is liable for the negligent handling of any type of confidential information that it keeps on employees or customers. A security breach that releases this information can result in class action suits by consumer groups or lawsuits brought by credit card companies suing over the wrongful release of consumer credit card information.

To prevent a security breach from hampering your business, Beth Romanowski, CIC, AU, an insurance marketer and technology specialist for The NIA Group’s Technology Division, advises that you take the following precautions:

• Install anti-virus software on all computing devices and automatically update your anti-virus software at least daily.
• Automatically receive virus and threat notifications from CERT or a similar provider.
• Publicize a Security Policy to all employees and contractors.
• Test a Disaster Recovery Plan that includes recovery from data center disasters.
• Test a Security Incident Response Plan that addresses both direct (e.g. hacking) and indirect (e.g. virus) attacks upon your network.
• Back-up your network data and configuration files daily.
• Store back-up files off-site.
• Allow remote access to your network only if it is via a VPN or equivalent.
• Always lock your server rooms and limit access to authorized personnel only.
• Speak to your insurance broker about the benefits of Security & Privacy Insurance.

What is Security & Privacy Insurance?

Security & Privacy Insurance can help protect your business from losses incurred with regard to this common and widespread liability threat.

Security & Privacy Insurance provides you with important third party coverage for liability arising from:

• A failure or gap in the insured’s network security.
• A failure to protect or wrongful disclosure of private or confidential information.
• A failure to protect Personally Identifiable Information from misappropriation.
• Violation of any federal, state, or local privacy statue alleged in connection with the failure to protect private information.

Security & Privacy Insurance also provides:

• Coverage for defense costs within policy limits.
• Duty to Defend coverage.
• Coverage on a “pay on behalf of” basis.
• Defense cost coverage for certain regulatory actions (subject to the insurer’s consent).

For more information on how Security & Privacy Insurance can help safeguard your business’s future, contact Beth Romanowski, NIA Technology Specialist at 201.845.6600, Ext. 1663 or bromanowski@niagroup.com.