Data Breach: A Wide Coverage Gap for Small Business
Based on what we see in the trade press, it would appear most large businesses in the U.S. are addressing their exposure to data breaches in some way. But what about the small, Main Street businesses such as those we write on BOPs every day? How many of the owners of these businesses are even aware that they’re exposed to the same potentially debilitating data breaches that have plagued the mega businesses familiar to everyone? The ultimate dollar cost of these Main Street breaches obviously does not approach those very expensive breaches that have gained national and international attention. However, in proportion to the small firm’s net worth, the negative effect on the small firm’s bottom line of a breach of its data could be at least as significant.
47 states, the District of Columbia and Puerto Rico impose specific and potentially expensive obligations upon a business that suffers a breach of personal data of others held by that business. The challenge for small business, however, is no traditional, off-the-shelf commercial insurance coverage covers the costs that are incurred to comply with the various state statutes and respond in a responsible and meaningful way to a data breach.
Luckily, policies and endorsements have begun appearing that can provide a solution to this exposure. Please join our webinar on January 12th to hear more details about the data breach exposures of Main Street businesses and the desirable coverage characteristics of a meaningful data breach insurance policy or endorsement.