Don’t play around with cyber security

Don’t play around with cyber security

From April 17 – 19, “an illegal intrusion” into Sony’s PlayStation system caused “a compromise of personal information” for up to 77 million user accounts. To put this into perspective, 77 million is only slightly less than the combined populations of the United Kingdom, Ireland, Sweden and Norway.

 As with the recent Epsilon data breach, “phishing” is a major concern. This has prompted Sony to warn PlayStation users “to be especially aware of email, telephone, and postal mail scams that ask for personal or sensitive information.”

The data breaches at Epsilon and PlayStation demonstrate that all companies are vulnerable to the risk of cyber theft. And while all organizations will view an act of cyber theft as being unfortunate, it sometimes requires an actual event to realize the full costs of a breach.

At the outset, a company will lose hard earned trust with its clients that may never be regained. The fact that these clients may have to report the data breach to their own clients can cause the breach in trust to be irreparable.

While the financial cost will vary by jurisdiction, a rule of thumb cost per potential violation for notification and credit monitoring services for affected customers (where required) is $214 per record and $7.2MM per breach event (based on a 2011 Ponemon report).

Given the clear risk of a data breach and the potentially ruinous costs, insurance protection against a cyber security threat before one minute from normal strikes is now as basic as General Liability and Workers Compensation.

For more on Cyber Risk Click Here.

KMRD Partners provides risk management consulting and property & casualty insurance to protect against potentially catastrophic losses that wait on the other side of one minute from normal.  We are dedicated to anticipating risk, and helping firms to recover from unplanned events.

Contact us at before one minute from normal strikes your company, and we will identify potentially disastrous social media coverage gaps.


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