The costs are enormous: $5.5 million per data breach in 2011 with an average cost per compromised record of $194. Over 850 cyber-attacks were reported in 2011 with 174 million records compromised. There are three major cyber risks for associations: membership data, e-retail through the sale of educational materials and branded merchandise and ‘hacktivism.’
Data breach of identities holds the potential for significant financial consequences. Membership servicing should rely on only the best-in-class technology with strong user training. E-Retail increases credit card transaction volume and data breach risk. A robust web hosting platform with uniform protocols across domains plus ongoing training of technology users is essential to prevent cyber crime. Associations are vigilant against attempts to lampoon, diminish reputations or demean brands. Damages include defaced websites, cloned emails and violations of intellectual property. In contrast to financially motivated cyber criminals, ‘hacktivists’ grab anything they can find like customer records and emails.
Cyber liability insurance is one way to defend against this persistent problem. Components include: notification costs to notify those impacted, credit monitoring, public relations/crisis management and forensic services. Policies also cover claims for spreading a virus, computer theft, extortion or any unintentional act, mistake or error performed by employees. Some components of coverage address issues before a cyber-event occurs such as breach-preparedness service and computer system extortion coverage. Before insurance is purchased, a full organizational review of risk should be conducted. A legal review of contracts with third party vendors who store, manage or have access to member/donor data should also be done. After the review, ask for an outline of where cyber-liability coverage exists within the current insurance coverage and perform a gap analysis of what coverage does not exist.
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This post was written by Acumen_admin11950