Don’t Overlook Insurance For Cyber Losses

A recent survey showing a snapshot of risk awareness among US nonprofits shows that organizations are not protecting themselves against a multitude of risks, including cyber risk. The computer age has brought a dangerous new exposure to an organization that needs to be assessed. Ralph Coldiron of Energy Insurance Agency shares why nonprofits are more vulnerable to cyber risk and how we can protect ourselves.

Who is at risk for a data breach?
Any nonprofit organization that handles confidential information, has a computer network or handles personal identifiable information is at risk. Many organizations don’t have the financial capacity to have the most up-to-date software and firewalls, so they’re even more likely to have their data breached which poses a threat both to your finances, your members, and to the organization’s reputation.

Why would organizations need cyber-liability insurance?
It’s no longer a matter of whether you’ll be breached, it’s a matter of when – and many organizations are not aware that their standard insurance coverages typically don’t provide any cyber-liability coverage. They won’t cover damage to or loss of intangible assets, so there goes your donor list or any other valuable data you’ve collected, which can throw a wrench into your organization’s operations. Additionally, standard insurance coverages often don’t cover sensitive information getting into the wrong hands, in which case the entity that los the data is liable for any damages sustained by the victim. If your nonprofit doesn’t have the reserves to cover such a suit, you may want coverage to protect against lawsuits brought by third parties. A cyber-liability insurance policy accounts for the unexpected and protects the nonprofit’s assets.

How do you choose the right coverage?
Cyber-liability insurance is often industry specific and varies based on the organization’s type of risk and level of exposure. If you collect any sort of sensitive information, it’s absolutely worth it. Many cyber-liability products offer a menu of insuring agreements, so you can choose the coverage that works for you. Working with an experienced insurance agency and agent can get you the best coverage for your organization.