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Cyber Protection

According to the National Association of Insurance Commissioners (NAIC), “Most businesses are familiar with their commercial insurance policies providing general liability coverage to protect the business from injury or property damage. However, most standard commercial lines policies do not cover many of the cyber risks. As data breaches occur more frequently, there are additional pressures for businesses to step up efforts to protect the personal information in their possession.”

In the event of a data breach, there are many out-of-pocket expenses that a small merchant can incur, and these only increase with the size of the business. A list of some of the expenses associated with data breach is shown below:

  • Fines and Penalties - Regulations of the Payment Card Industry Data Security Standard (PCI DSS) require that a merchant suspected of having a data breach undergo forensic examination, which will take time and money. A point-of-sale (POS) system may need to be shut down during the examination in order to preserve any evidence. If the merchant has not complied with PCI DSS, fines may also be assessed.

  • Costs Associated with Customer Notification and Dissatisfaction – According to the National Conference of State Legislatures, “Forty-eight states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands have enacted legislation requiring notification to individuals of security breach of personally identifiable information."2 The more customers, the more cost involved in sending notifications. Additional fees may accrue for customer credit monitoring requirements, as well. This does not account for potential lawsuits claiming liability.

  • Costs Associated with Restoring the Business Reputation – In the end, a public relations firm may need to be hired, and other fees associated with payment card and equipment replacement costs are also likely to create additional cost to the data breach.

At Illinois Casualty Company, we strive to be the expert in the food and beverage industry and are continuously working to provide the best products for our niche. With the food and beverage industry being second only to retail in data breaches, Illinois Casualty Company has taken the approach to automatically include first- and third-party Cyber Protection in every Businessowners Policy. This provides coverage for losses to the business, as well as liability toward others, which the business may incur. Coverages and coverage limits included in Cyber Protection are as follows:

Coverage Limits
Multimedia Liability Coverage $50,000 Each “claim”
Security and Privacy Liability Coverage $50,000 Each “claim”
Privacy Regulatory Defense and Penalties Coverage $50,000 Each “claim”
Privacy Breach Response Costs, Notification Expenses, and Customer Support and Credit Monitoring Expenses Coverage $50,000 Each “claim”
Network Asset Protection Coverage $50,000 Each “claim”
Cyber Extortion Coverage $50,000 Each “claim”
Cyber Terrorism Coverage $50,000 Each “claim”
BrandGuard™ Coverage* $50,000 Each “claim”
PCI DSS Assessment Coverage $50,000 Each “claim”
Aggregate Limit $50,000 Each “claim”

*Coverage for lost revenue directly resulting from an adverse media report and/or notification to customers of a security or privacy breach.

For more information on how your food and beverage business can benefit from our expertly crafted insurance products and services, visit www.ilcasco.com.

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