platinumpoolcare.com
coverage that will cover this exposure. A cyber policy that includes this third party liability typically provides defense costs and cover the damages, settlements, and judgments that the association is legally obligated to pay. Many board members are unaware that they may be held responsible for protecting their residents’ private information. Even if the private information is solely handled by a property manager, the association is still the entity responsible for providing notification. Because of this, it is critical that an association carries cyber coverage that will pay for notification costs (first-party cyber) and the legal costs of a lawsuit resulting from a data breach (third-party cyber).
On top of coverage for notification costs and legal fees, insurance carriers may also include coverage for other miscellaneous costs associated with a data breach. These additional coverages include the costs associated with the following: hiring a computer forensics firm that will investigate the cause and extent of a privacy breach, hiring an attorney that will negotiate with regulators, providing credit monitoring services, and remediating deficiencies that gave rise to a privacy event. By carrying a cyber policy that includes these coverages, an association is not only protecting themselves from the direct costs associated with a privacy event, but they are also ensuring that they are making the correct changes that will prevent a similar event from happening in the future.
From just 1.7% in 1997 to 51% in 2017, the percentage of the world that has access to the internet is skyrocketing. The past 21 years have seen incredible changes in technology – from smart phones, to advanced computing and self-driving cars – technology continues to evolve at an astonishing speed. As the risks associated with technology evolves, so does the insurance industry. Although how cyber insurance will evolve is uncertain, what is certain is that the need for cyber insurance is sure to grow. Some analysts predict the market for cyber insurance will increase to $10 billion between 2020 and 2025. At Berkshire Hathaway’s 2018 Annual Shareholders Meeting, Warren Buffet stated, “There’s a very material risk which didn’t exist 10 or 15 years ago and will be much more intense as the years go along.” So if one thing is certain, it is that cyber-crime is going to continue to grow and so will the cyber insurance industry. Because of this, community association boards and property managers should stay up to date with this evolving risk and work with their insurance broker to obtain appropriate coverage.
44 | COMMON INTEREST®
FOLLOW THE POOL CARE LEADER
construction • renovation • service • maintenance openings • closings • equipment • chemicals
platinum-poolcare
300 east industrial lane, wheeling, illinois 60090 p847-537-2525 • f847-537-3857
John Gitzinger - Commercial Service Director
johng@platinumpoolcare.com
Join us at: • Winter 2018 • A Publication of CAI-Illinois Chapter
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