Staffing Companies and Cyber Exposures
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The Verizon 2013 Data Breach Investigations Report looked at over 47,000 reported security incidents and 600 confirmed data breaches. Over the nine years that they’ve been compiling data, over 1.1 billion records have been compromised.
So where's your staffing company exposed?
Your staffing company has a large amount of personal information for internal employees, as well as applicants and active temps. And you most likely keep this information for years after an employee leaves your agency. Most of this information is housed electronically, but you may also have paper files too. Typical information a staffing company would have on file that could be breached are the following:
- Checking account information
Staffing companies are also exposed when temps have access to personal information. For example, in a retail environment, temps could be swiping credit cards. For IT staffing, they may have access to sensitive information on servers and computers they are working with.
Cyber Liability coverage exists to protect you, as a staffing owner, from financial loss, should there be a breach in security. Coverage can include:
- Response and notification expenses to all affected (possibly affected) parties
- Investigation of breach
- Credit monitoring of those affected, sometimes for several years after a breach
- Defense costs
- Public relations expenses and more
One of the most costly ramifications of a data breach is the response and notification expenses to those impacted by the breach. Depending upon the amount of records that one has, such costs can escalate from hundreds of thousands of dollars to millions. Therefore, typical coverage limits can range from $1,000,000 to $10,000,000.
Other aspects of Cyber Liability include coverage for communicating or conducting business online. Online communication tools could result in claims alleging breaches of privacy rights, infringement or misappropriation of intellectual property, violations of obscenity laws, the spreading of computer viruses, and defamation.
If Cyber Liability is not one of your current coverages, we encourage you to incorporate it into your 2015 business plan. We anticipate seeing this more often in contractual wording moving forward.
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