With businesses using electronic records, cyber-based transactions and mobile electronics, it’s no secret that the risk of a data breach is an increasing concern. The effects of a data breach are long lasting and could be financially devastating. Data compromise coverage is an innovative product designed to help small and midsize businesses respond to data breaches and offers identity theft recovery for designated executives of an insured organization.
Almost all states have enacted data breach notification laws requiring affected businesses to notify customers that their personal data has been lost or stolen. It can be complicated and expensive to respond to a data breach. In fact, notification is estimated to cost about $100 per customer. Add in the expenses of identity theft recovery services, forensic IT services, lost and/or interrupted business, and reputational damage, and it’s easy to see why many businesses seek solutions to this threat.
Data compromise coverage is available through EMC Insurance Companies at an affordable premium. This policy offers coverage for response expenses, defense and liability, and identity recovery.
Response Expenses Coverage: includes a legal and forensic information technology review of the breach, notification to the affected individuals, and services for the affected individuals, including a toll-free help line, credit monitoring and identity restoration case management.
Defense and Liability Coverage: provides coverage for data compromise defense and data compromise liability in the event that affected individuals sue the insured. There must first be a covered loss under the response expenses coverage before defense and liability coverage becomes effective.
Identity Recovery Coverage: provides expense reimbursement and case management services for key individuals within the insured organization. Expenses include various legal costs, lost wages, child and elder care costs, mental health counseling and other miscellaneous unnamed costs. Insureds who are victims of covered identity thefts are assigned a case manager who provides them with a wide range of identity recovery services, including letter writing, phone calls, credit report requests, follow-up and record keeping.