Trade associations may have different structures and missions than traditional businesses, but they face many of the same risks, and data breaches are no exception. Modern technology has facilitated the work that trade associations do in numerous ways, but it is important to recognize and plan for the potential drawbacks of trusting information to machines.
What Is Cyber Liability Insurance?
Cyber liability insurance is a type of policy that can protect a trade association’s liability and cover some internal expenses in the event of a data breach that exposes the personal information of its members.
Responding to this type of breach can be very expensive as it typically includes legal and forensic services as well as public relations expenses. In addition, the individuals whose information was compromised must be notified of the breach, and the association must offer them credit monitoring and identity restoration services. All of these expenses may be covered by cyber liability insurance.
Why Do Trade Associations Need This Coverage?
Any organization that collects confidential or sensitive data must protect that data from unauthorized access and use. Trade associations, like other organizations, are vulnerable to data breaches due to hackings. Modern hackers are growing increasingly sophisticated and are constantly changing their approach to stay ahead of measures intended to prevent hackings.
As more traditional targets like banks and e-commerce companies strengthen their protection, many hackers are shifting their focus to other organizations in their attempts to steal data. Smaller businesses, nonprofits and trade associations do not have the same resources that large corporations have when it comes to cyber defense, yet they do possess the highly valuable data that cyber thieves need to steal identities and funds, making them very attractive targets.
However, hacking is not the only way that a trade association’s data can be breached. For example, data could be accidentally released due to a staff member’s inexperience working safely with computers or the Internet. In addition, laptops or mobile devices that contain sensitive data could be misplaced and fall into the wrong hands.
Here are some examples of how trade associations can be vulnerable to data breaches:
- A hacker could gain access to a vendor software program that keeps track of the association’s payments and credit card transactions
- An employee’s bag could be lost or stolen with a USB flash drive that contains sensitive information about members and board sessions
- A computer malfunction could inadvertently distribute your trade association’s confidential information through mass emails or posts with sensitive data on a website
- An employee of a vendor could scan your trade association’s credit card information and sell it to another party for illicit purposes
Types Of Cyber Liability Insurance That Can Benefit Trade Associations
Cyber insurance packages, like other types of insurance, are highly customizable and are typically tailored by an insurance broker to suit the specific needs of a particular organization. However, most cyber liability insurance will include the following types of coverage:
Extortion Liability Coverage
This covers losses related to extortion threats as well as professional fees that stem from dealing with the extortion.
Crisis Management Coverage
Crisis management covers expenses related to the investigation and remediation of incidents as well as notifying the individuals whose information was exposed and providing credit checks.
Network Security Liability Coverage
This provides coverage for third-party damages that arise when hackers deny the association’s owners access to their own website and expenses related to the theft of data stored on third-party systems.
Other Ways Of Protecting Yourself
Cyber liability insurance is an indispensable type of policy for protecting trade associations, but there are other steps your association can take to mitigate risk.
Draft A Cybersecurity Policy
Look at your local laws and governing documents and create a cybersecurity policy that determines which individuals will have access to data and who will be in charge of managing your association’s cybersecurity. Ensure that administrative privileges and access to sensitive data are limited only to those who need it most.
Create A Plan Of Action
To prepare for potential data breaches, you can use online guides provided by authorities such as the Federal Trade Commission to secure your association’s data and protect the data of your customers. Set up a plan of action that will be followed in the event of a hacking or a security breach.
Set up rules for using computers and mobile devices that belong to the trade association to ensure that unauthorized people will not have access to confidential information.
Educate Your Association’s Employees
Educating your association’s employees about cybersecurity must be a priority. Ensure that everyone who has access to computers and information is aware of the best practices regarding password use, software updates, antivirus solutions, data encryption, and regular backups.
Reach Out To The Trade Association Insurance Professionals
Get in touch with the experienced commercial insurance brokers at CI Solutions to learn more about our commercial cyber liability policies that can protect your trade association from a range of risks. We will work with you to define your coverage needs and determine the right options to suit your budget.