No business is too small for cyber criminals

Cincinnati Insurance Company Blog Post (3/31/16) - Kate Miller

Data breaches make the news when big retail chains get hit with a cyber attack. You may even be notified of the breach by the retailer if they have reason to believe your data was compromised. Or, you may read about data breaches when you receive a new credit card or are offered identity theft protection.
What you might not hear about are the cases where a business owner goes bankrupt after a data breach. A 2012 study by the National Cyber Security Alliance found that 60 percent of small to midsize businesses that suffered a breach went out of business within six months.

FIRST LINE OF DEFENSE

Your first line of defense as a business owner is to educate yourself on how to prevent or mitigate a breach. Follow news reports, and take advantage of online materials available to help you prepare for and respond to cyber attacks.

SECOND LINE OF DEFENSE

Your local independent insurance agent could be your second line of defense, providing information about Internet exposures and insurance products. Any business that handles private information is at risk of breach and subject to cyber exposures. Private information includes personal identifiers (Social Security numbers, birth dates, driver’s license numbers, etc.), financial information (bank or investment accounts, credit cards, etc.), medical or medical claim history, employee personal data or student records.
Companies that use third parties to process their transactions or record keeping, such as payroll, employee benefits or billing, also have the potential for a cyber loss. Consider the possibility of that third party experiencing a data breach where you might be ultimately responsible for the breached records.

WHY BUY CYBER INSURANCE?

Cyber insurance can reimburse for expenses incurred such as:

-Breach notification law compliance – 47 states have data breach notification laws that include an obligation to notify those whose information has been breached and certain federal laws, such as HIPAA, may also require similar notifications.

-Breach response costs – for example, notifying and providing services to affected individuals

-Opportunity costs and out-of-pocket expenses involved in resolving identity theft problems for business owners and customers

-Damage to the business computer systems and data due to unauthorized access, hacking, malware or denial of service attacks.

Remember, data comes in all forms, paper and electronic, and business owners need to protect data to manage risk.

To File or Not to File a Claim?

When should I file a claim and when should I not?  It is a common question we get in our agency and every time it is asks we always say, "it depends on each situation".  Let's first tackle this question with how claims can affect your insurance. 

It varies by insurance company but most companies look at a 6 year window for home insurance claims and a 3 to 5 year window for auto insurance claims.   What this means is that if you file a home claim it can have an affect on your premium for up to 6 years and if you file a claim on your auto insurance it can affect your premium for 3 to 5 years.  If you have more than one claim in this window of time it can really have an impact on your premium and may even cause some insurance companies to look at canceling your coverage.  With this in mind, it is best to consult with your insurance agent to see what prior claims you have on your record before deciding whether or not to file a claim.  If you already have a  claim inside one of those windows of time then it may be worth contemplating whether to file a claim or not.

Let me break for one second to mention that liability claims are a must file.  These would be auto accidents that involve a third party bodily injury or a homeowner claim that involves injury to another person.  These need to be handled by the insurance company and their legal firms.  Also, if you have a large claim such as a totaled vehicle or large size house damage, these too are claims you would want to file without hesitation.  The claims that we are talking about that may or may not be worth filing are things such as backing your car into a light post, backing into an unoccupied car or driving off the road and causing damage to the front bumper when you hit a ditch.  On the homeowner side, it would be small claims such as ice dams that cause a $1000 or $2000 worth of damage or a roof claim that the repair is only a $1000 or so.  These are the types of claims it is worth contemplating prior to filing.  When you factor in deductibles and the affect on your premium for a few years, those smaller claims may be best to pay out of pocket.

Protect Your Building from the Cold

Arctic temperatures can have a dramatic effect on your building — and your livelihood. Regular maintenance and a winter weather plan can help you avoid any negative impact.

WHAT CAN HAPPEN

Winter storms frequently cause electrical power failure, which in turn can disable your heating system. If this happens, water-filled piping (such as sprinklers, domestic water pipes and heating, ventilation and air conditioning systems) may freeze and rupture. It is important to assess the potential for this hazard.

• Inspect all safety shutoff valves and cutoff switches on combustion equipment such as rooftop units, boilers and ovens, including water main shutoffs and main electrical service disconnects.
• Have qualified contractors or staff properly inspect heating, air-handling units and space heaters on at least an annual basis. Assure that space heaters are monitored for fire safety.
• Review the location and storage of flammable liquids such as propane, gasoline and diesel fuel. Should your sprinkler system freeze and require that it be disabled, it is recommended to reduce this storage to a minimum to minimize the amount of fuel in a fire.

Without proper winter weather preparation, your business could experience property damage — roof collapse, pipe rupture and more.

HOW TO REDUCE YOUR RISK

There are some strategies you can implement to protect your facility and minimize the impact of severe weather on your business:

• Maintain building temperatures above 55 degrees. Plan for maintenance personnel to properly monitor buildings during cold snaps, making more frequent visits to buildings or areas of buildings not normally occupied.
• Inspect all areas along the inside and outside perimeters of the building to ensure they are sealed and there are no drafty areas.
• Maintain roofs in good condition, including repairing leaks, securing flashing and clearing debris from the roof, roof drains and overflow scuppers.
• Check that downspouts are secured to buildings and clear of leaves and debris. If they iced over during a previous winter, consider properly installing heat trace to prevent major icicles and dams.
• Make sure all building openings are weather-tight so they do not admit cold air.
• Consider how you’ll address removing snow accumulation on your roof. If you or a contractor use a snow blower, make sure the height of the snow blower shave plate is adjusted higher as to not damage the underlying roofing material.

Gusting winds, heavy snow and bitter temperatures can create catastrophic property losses and havoc in your life, but a little preparation can prevent losses, saving you time and money.