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North Hills Monthly

Liability Insurance One Way to Protect Yourself from Cyber Crime

Aug 31, 2016 10:29AM ● By Jill Cueni Cohen

Cybercrime is on the rise as more people shop online and an increasing amount of consumers' personal information is shared with companies. According to the Federal Bureau of Investigation (FBI), billions of dollars are lost every year repairing systems hit by cyber attacks. Such attacks cause harmful disruptions to vital systems, including those that control hospitals, banks, and 9-1-1 services around the country.

Criminals from all corners of cyber space are plotting to steal information from businesses, government and individuals with no end in sight. However, David McDonnell, property casualty sales consultant for Northwest Insurance Services (with offices in Bellevue and Butler), says that there is a new way to mitigate the high cost of repairing your credit in the event of a personal or business-related cybercrime.

"Individuals and businesses are advised to purchase cyber liability insurance," said McDonnell, noting that this differs from credit monitoring or credit repair services. "More and more insurance companies are providing cyber liability protection in their personal insurance programs."

McDonnell added that it's not uncommon for an individual to incur expenses well over $10,000 to repair his or her identity, but insurance coverage will mitigate that loss. "There are several major credit monitoring agencies in our country that a consumer can subscribe to in order to monitor their personal credit activity, however, if your identity is breached or stolen, the credit monitoring agencies generally don't provide the costs necessary to repair your identity,” he explained.

“For example, if you find that someone has fraudulently purchased a home or auto in your name, your costs can be exorbitant to have your identity repaired and corrected,” he continued. “Cyber liability insurance is growing in importance because of how much of our personal identity is exposed in today's cyber-based world."

With hacker attacks taking place on companies that many people frequent, like Target and Home Depot, it's apparent that such insurance is also crucial for commercial businesses—large and small. "Many businesses maintain their customers' personally identifiable information in their databases, including name, address, credit card information and sometimes social security numbers,” said McDonnell. “In the event that a business’ network is breached and their customers’ personally identifiable information is compromised, the business may be found liable for the costs associated to notify their customers of the breach and costs associated with repairing the damage to their customers’ credit.

“Businesses are now able to purchase cyber liability coverage to protect themselves from such occurrences," he continued, noting that the majority of states have passed legislation requiring businesses to notify their customers in the event that personally identifiable information is breached.

Pittsburgh is actually the epicenter of the FBI's efforts to identify, mitigate and ultimately neutralize cybercrimes, thanks to the locally based National Cyber-Forensics and Training Alliance (NCFTA), a nonprofit cyber threat information sharing organization that will soon be opening offices in Los Angeles and New York City. Established in 2002, the organization is also involved with projects targeting malware and digital consumer protection standards through a collaborative international effort to combat and defeat cybercrime through shared intelligence.  

According to NCFTA, cybercrime also supports and enables other crimes, including human and drug trafficking, terrorist activities and child exploitation. Through NCFTA initiatives, hundreds of criminal and civil investigations are underway with the hope that this combined intelligence will outwit hackers, but it's still up to individuals to protect themselves.

"As a consumer, your obligation is to be aware of your credit activity," said McDonnell, noting that by shopping online and using computers and smartphones—especially in public—you’re putting your information out there. "You can take some simple steps to protect yourself from these cyber credit threats. It's important to have current, up-to-date security and virus protection on computers. Get in the good habit of updating your passwords regularly, and if you’re not already doing so, take the step to monitor your personal credit."

Elderly folks who are less computer-savvy may be tricked by ‘phishing’ emails, which mimic a trusted company's logo and ask for personal information. "This is why it's critical for people to be aware and protect their own information," said McDonnell. "Talk to your insurance agent about the availability of cyber liability coverages on your homeowner’s or business insurance program to provide that added layer of protection and peace of mind in today’s cyber world."