People were celebrating a recent New Year’s Eve in the streets and clubs of San Diego, when burglars broke into the offices of a nearby company and carried off computer hardware. Undiscovered until after the holiday, it appeared to be a random theft.
In addition to the computers, the burglars got away with three projectors and a $30 box of chocolates.
That simple theft of easily-replaceable computer hardware turned into a nightmare for the company, a medical records reviewer for Workers’ Compensation and auto insurers. It turns out, the burglary compromised the privacy of more than 14,000 claimants and the company ended up seeking bankruptcy protection from an estimated $2.5-million in potential liabilities against reported assets of only $226,000.
According to a report in Workers’ Comp Executive, the firm’s liability policy would not cover potential losses stemming from data theft, and the company did not have a separate cyber-liability policy.
The information on the stolen computer hard drives, used to back up information received from insurance carriers, included personal information such as names, addresses, Social Security numbers, and medical diagnoses of 14,000 people – the potential claimants – living in the United States and abroad.
In its bankruptcy claim, the company pointed out that it has been unable to contact the individuals whose data was breached, citing the enormous cost – though the firm has notified all of the carriers that supplied the data, some of whom have notified their claimants.
Random burglaries and theft, in addition cyber hacking and employee vandalism, is a real threat to offices and companies that collect and store personal data, especially the dentist offices I specialize in. Plus, most business owners are not aware that their standard insurance coverage (Malpractice, General Liability, and Property) typically doesn’t provide proper coverage for cyber and privacy liability.
Anyone that collects and electronically stores information should have cyber liability.
I have found that nearly every dental practice carries a significant exposure to cyber risk because they:
- Obtain social security numbers, personal health information, driver’s license numbers, bank account numbers and credit card information of patients
- Are in the process of going paperless or stores paper files
- Provide online access for payment
- Have a web site
- Rely on a computer network on a daily basis
Can it happen to you? Of course. Burglaries happen.
According to the owner of that San Diego company, “My guidance is to be aware of [random acts occurring] and to have insurance coverage, cyber insurance that would cover such criminal acts.”
I can help you protect your dental office from cyber attack with a dedicated new policy package that is flexible and affordable.
- It’s modular. You pick and choose appropriate coverage lines.
- It provides industry-leading coverage for both 1st party and 3rd party exposures.
- I can help you understand it. At any point, I can help explain the coverage in detail and answer your questions.
Unfortunately, random theft, cyber hacking, and employee vandalism are a reality for small businesses these days, and can be an incredibly damaging nightmare. Whether burglars steal your computers – or just a box of chocolates – random acts of thievery can be devastating.
To learn more – and to be protected against a cyber security breach – please contact me today.