identity theft coverage on insurance policies · identity theft coverage on insurance policies....
TRANSCRIPT
S P O N S O R E D B Y
IDENTITY THEFT COVERAGEON INSURANCE POLICIES
Slide 1
Identity Theft Coverage on Insurance Policies
November 8, 2013
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Slide 2
What’s the big deal?
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Slide 3 PIIPersonally Identifiable
Information
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Slide 4 “PII”Among other things, First Name (or
initial) and Last Name in combination with either:
•Social Security Number
•Drivers License Number
•Financial Account Number
•Credit/Debit Card Number
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Slide 5 PII HOLDERS
• YOU!
• Small businesses that use outside vendors
• Accountants
• Financial institutions
• Education
• Information technology
• State government
• Manufacturing
• Utilities, energy
• Any business with a website used for e-commerce
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Slide 6 2012 STATISTICS
Number of people victimized increased 13 percent, to 12
million
2.2 million more victims than in 2011
Overall losses from identity fraud also fell last year, to $37 billion
Source: Javelin Security and Research Inc.
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Slide 7 However…Average amount of time to clear one’s credit history estimated at 607 hours
Source: Identity Theft Resource Center
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Slide 8 Over 20% of victims have increased medical
expenses due to stress resulting from the
emotional impact of identity fraud
Source: Identity Theft Resource Center
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Slide 9 Average out of pocket expenses:
2009: $3872012: $631
Source: Identity Theft Resource Center
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Slide 10
New ways of doing business
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Slide 11
New ways of doing business
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Slide 12 Rise in identity fraud tied to smartphone use
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Slide 13
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Slide 14
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Slide 15
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Slide 16 RISK MANAGEMENT TECHNIQUES
Avoidance
Prevention
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Slide 17
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Slide 18 PASSWORDS THAT SAY “HACK ME”
1. 1234562. 123453. 1234567894. Password5. iloveyou6. princess7. rockyou8. 12345679. 1234567810. abc123
11. [Your Name]12. [Your mate’s
name]13. babygirl14. monkey15. Jessica16. Lovely17. michael18. Ashley19. 65432120. Qwerty
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Slide 19 TrSwTwSi04&07bN12
Ih2dWa28&32Yo
M5kpri24:51
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Slide 20 PREVENTION
Shred
Don’t carry Social Security card (Medicare!)
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Slide 21 PREVENTION
Don’t carry all of your credit cards
Be careful about leaving outgoing mail in your mailbox
with the “flag” up
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Slide 22 PREVENTION
Check your bank statement every month
Get your credit report every year
Pick a random PIN
When ordering checks, pick them up at the bank
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Slide 23 RISK MANAGEMENT TECHNIQUES
Retain the exposure
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Slide 24 IF THE CUSTOMER RETAINS THE
EXPOSURE…
Passive Retention “Don’t ask, don’t tell”
E & O
Active Retention
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Slide 25 RISK MANAGEMENT TECHNIQUES
Retain the exposure
Fund a reserve for the exposure
Contractually transfer the exposure
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Slide 26 ALTERNATIVES TRANSFER CHOICES:
Credit card “coverage”
Bank “coverage”
Stand-alone “coverage”
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Slide 27 RISK MANAGEMENT TECHNIQUES
Retain the exposure
Fund a reserve for the exposure
Contractually transfer the exposure
Transfer to Insurance Company
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Slide 28 ISO HO-91 version
6. Credit Card, Fund Transfer Card, Forgery and Counterfeit Money
We will pay up to $500 for:
Legal obligation from loss of credit card
Loss resulting from theft/unauthorized use of a fund
transfer card
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Slide 29 ISO HO-91 version
6. Credit Card, Fund Transfer Card, Forgery and Counterfeit Money
We will pay up to $500 for:
Loss caused by forgery or alterationLoss from accepting counterfeit
currency
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Slide 30 ISO HO-2000 &2011 version
6. Credit Card, Electronic Fund Transfer Card, Forgery and
Counterfeit Money
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Slide 31 Example of ID Theft Expenses
Total Costs Covered by Homeowners $0
Long distance phone expense $467
Notary fees $200
Lawyer expenses (for help with affidavits)
$3,450
Copying and Mailing Costs $142
Total Costs $4,259
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Slide 32
Increases $500 limit to up to $10,000
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Slide 33
Pays for your:
Lost Income to meet with lawyers ($200 per day)
“Reasonable” attorney fees to defend you
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Slide 34
Pays for your:
Loan origination feesLong distance calls
Mailing costs
All Subject to $15,000 per occurrence
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Slide 35
All Subject to $250 deductible
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Slide 36 Example of ID Theft Expenses with HO 04 55
Total Costs Covered by Homeowners $4,259
Long distance phone expense $467
Notary fees $200
Lawyer expenses (for help with affidavits)
$3,450
Copying and Mailing Costs $142
Total Costs $4,259
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Slide 37
Is That Enough?
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Slide 38 Data Breaches to Companies
80% cost < $1M
15% cost between $1M and $20M
5% cost > $20M
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Slide 39
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Slide 40
Business Income/Extra Expense
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Slide 41 Data Processing Equipment, Media and Data Inland Marine Policies
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Slide 42
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Slide 43
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Slide 44
Commercial Crime Policy
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Slide 45
Types of Cyber Coverage and Limits Available
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Slide 46 Liability
Remediation
Fines and/or Penalties
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Slide 47
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Slide 48 Failure to secure data
Loss caused by an employee
Acts by persons other than insureds
Loss resulting from the theft or disappearance of private
property
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Slide 49 Types of Data Covered
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Slide 50 An individual’s personally identifiable information
Nonpublic data (such as corporate information)
Non-electronic data, such as paper records and printouts
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Slide 51
Remediation Costs
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Slide 52 Crisis management services
Notification of potentially affected customers
Credit monitoring services to affected customers
Costs to re-secure data
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Slide 53 EXTERNAL REMEDIATION COSTS
Cyber-crime attorney services: fees run $700 per hour
Investigation: computer forensics fees ranging from $300 to $700
per hour
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Slide 54 EXTERNAL REMEDIATION COSTS
Public Relations Experts: to deal with the media with charges
running perhaps $10,000/month billed at rates of $400 per hour
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Slide 55 REMEDIATION COVERAGE SERVICES
Remediation services are pre-negotiated and prepackaged
Much like Kidnap and Ransom coverage, knowing how to respond to a loss can be
daunting.
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Slide 56 PROPERTY AND THEFT COVERAGES
Proprietary data is the most important that has to be
considered…
…but also data that is in your insured’s care, custody or control
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Slide 57 LIABILITY COVERAGE
Carefully consider who is an “insured”
Policies differ
Most policies do not cover subcontractors, who may represent
the largest exposure
Most will add subs for an additional premium
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Slide 58 LIABILITY COVERAGE
Clarify what is a “claim”
Again, policies differ
Policies do not specifically address the effects of “phishing”, “pharming,”
or identity theft
They are addressed through breach of security sections, or unauthorized
access
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Slide 59 CLAIMS REPORTING, ERP OPTIONS, ANDCOUNSEL
All liability forms are claims-made
Extended Reporting Period options are important
Carriers reserve the right to choose counsel
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Slide 60 PRIOR ACTS COVERAGE
All policies offer prior acts coverage
Many require it
Territory
All of the policies provide true worldwide coverage, regardless
of where the suit is brought
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Slide 61 SPECIFIC COVERAGES INCLUDED IN POLICY
Errors & Omissions
Virus
Unauthorized Access
Security Breach
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Slide 62 SPECIFIC COVERAGES INCLUDED IN POLICY
Personal Injury
Advertising Injury
Loss of Use
Resulting Business Interruption
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Slide 63 SPECIFIC COVERAGES INCLUDED IN POLICY
Copyright Infringement
Trademark or Service mark Infringement
Patent Infringement
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Slide 64 EXCLUSIONS
Every policy differs; Watch for those related to:
Bankruptcy/financial impairment
Intentional acts
Theft of Intellectual Property
Loss of use
Contractual Liability
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Slide 65 RISK MANAGEMENT SERVICES
All of the companies offer risk management services, such as loss prevention, and risk assessments
Depending on the size of the account, a prior risk assessment may
be required before pricing
Many also offer tests by third-party service providers
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Slide 66 “Sometimes insurance is not the answer”
But, making customers aware of the coverage can save you
E&O problems
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Slide 67 “But we had locks”
Carol MeyerowitzCEO, TJX Companies
June 26, 2007
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