Equifax Data Breach – The Need for Cyber Liability Protection

cyber

 

Equifax, one of the three major consumer credit reporting agencies announced this week that they were subject to a prolonged and sustained data breach from mid-May to July. The breach, discovered on July 29, put 143 million consumers personal information (names, birthdays, addresses, social security numbers) at risk. Initial indications are that more than 200,000 consumers had their credit card numbers stolen.

Unfortunately, this type of breach is now a regular occurrence in our day and age. From Yahoo to Target, consumer information has never been more vulnerable. The Equifax breach is of special importance due to the nature of the personal information taken and also due in part to the fact that Equifax has suffered similar breaches in the recent past with no real improvements to their website vulnerabilities. In 2016, Equifax suffered a breach that resulted in the loss of W-2 tax and salary data from their users. Security professionals have been critical of the organization for not taking sufficient nor necessary steps to improve its security practices after previous breaches.(1)

Equifax has offered credit monitoring and protection services to all consumers in the United States, even if their data was not compromised. This goes beyond what is legally required but, given the severity of the breach, could be considered a corrective measure that necessarily falls short.

Insurance Impact

  • Nearly every state has different notification laws of a cyber breach or event. Notification costs for each record lost/stolen is $141 on average. (2)
  • Given the information Equifax stores and the previous security breaches, Equifax likely purchases a substantial Cyber insurance policy to help protect against events just like this.  
  • Equifax is likely facing a large D&O suit from consumers and shareholders alike given the severity of this event, the lack of corrective measures from previous data breaches and due to reported sales of shares by executives after discovery of the breach and before reporting the breach.(3)

How Do I Protect My Business?

It’s increasingly important for businesses to learn how to protect themselves against these events. While your client and proprietary data are always at risk, a cyber liability policy can help hedge or completely offset the financial impact of a potential breach. Recent reports indicate that the monetary value of data is increasing year-over-year. Without the proper insurance, your business might not be able to survive a cyber breach.

Want to know more or figure out what a cyber liability policy would cost? Fill out an application here or give us a call at (646) 844-9933 !

Sources

  1. Equifax Says Cyberattack May Have Affected 143 Million in the U.S., New York Times
  2. IBM 2017 Cost of Data Breach Study, IBM
  3. Equifax Says Cyberattack May Have Affected 143 Million in the U.S., New York Times

 

 

 

Introducing Paul Rosen as CoverWallet’s COO

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We are excited to introduce Paul Rosen, as our newest addition to the CoverWallet team! Paul joins CoverWallet as our new Chief Operating Officer, to help guide us as we strive to provide our customers best-in-class products and service. Paul is joining us from OnDeck, a small-business lender, where he served as the Chief Sales Officer over the past 6 years. During his time leading the sales organization at OnDeck, Paul grew annual revenues from $10M to over $300M and played a crucial role in OnDeck’s transformation from financial startup to public company.

Paul’s track record growing tech-enabled, leading financial organizations within regulated and competitive markets will allow CoverWallet to expedite the requisite steps to become the go-to resource for all things business insurance for small businesses everywhere! We are thrilled that someone of his caliber has joined our already deep team and brings with him an understanding of our vision and commitment to bring a better way to understand, buy and manage insurance, all in one place!

Based in New York City, CoverWallet launched in early 2016. CoverWallet combines data, thoughtful design, and technology to help small businesses deal with their insurance needs with a few clicks, whether from their phone or online. With an intelligent assessment system and concierge-like service, CoverWallet saves time and provides peace of mind by making understanding, buying and managing insurance simple and intuitive. CoverWallet recently won “Best Insurtech Solution” at the 2017 Benzinga FinTech Awards. For more information, please visit www.coverwallet.com.

For more about Paul joining CoverWallet, click here.

 

 

Small Business Story: Florida Ave. Grill Maintains 1944 Ambiance Despite Facing Risks

The CoverWallet Small Business Scholarship encourages entrepreneurship in students by asking them to take on the perspective of a local small business owner. Students share their perspective on the opportunities and challenges faced by a business in their community.

Student: Breanna Lipsey,  Howard University

Small Business: Florida Avenue Grill

I’m still trying to figure out what reminds each customer of home. Is it the varying shades of chipped white china the food is served on? Are there particular ingredients that are used in every household across America? Does the 90’s R&B take them back to a time of free-spirited love and unity? Whatever it is, Florida Avenue Grill is able to deliver that “mama’s cooking” every time. People from all across the country claim The Grill must have their kin in the kitchen. Locals sometimes wait an hour just to sit next to a total stranger and eat breakfast at 3:00 PM. Whatever the circumstance, customers come expecting a soulfully cooked meal and end up leaving with a therapeutic reminder of the beauty of a home-cooked meal. I adore Florida Avenue Grill for providing that home feeling for each and every one of its guests but also fear that it may be its greatest risk factor. The demands of its surrounding community has changed; once coined as The Chocolate City, Washington, D.C. is now experiencing gentrification. The neighborhoods around Florida Avenue Grill, which were once filled with college students, families, and the “Go-Getters” of the time, are now filled with young professionals who live fast-paced lives. Florida Avenue Grill offers a full dine-in experience, catered to each of its customers. This means longer wait times for food, which is time these young professionals do not have.

Small Business Story: The Linden Store Flourishes in Small Restaurant Market

The CoverWallet Small Business Scholarship encourages entrepreneurship in students by asking them to take on the perspective of a local small business owner. Students share their perspective on the opportunities and challenges faced by a business in their community.

Student: Nathan Chiu, University of Pennsylvania

Small Business: Linden Store 

The scent of cured meat greets me as I open the deli door. Already, a line has formed, winding its way around the store. I don’t mind waiting. The premium sandwiches make the trip worth it and at least there’s air conditioning and shelter from the sweltering heat outside. Looking around, I see some familiar faces. Turns out they’re my high school classmates. I give a friendly wave and say hi. At last it’s my turn to order at the counter. I order my usual “Isabella” sandwich, a sumptuous sandwich containing prosciutto, thick slabs of cheese, and tomato. I pay at the register, step out of the store, and drive home.

Small Business Story: Naked Feet Yoga Faces Risks in Niche Market

The CoverWallet Small Business Scholarship encourages entrepreneurship in students by asking them to take on the perspective of a local small business owner. Students share their perspective on the opportunities and challenges faced by a business in their community.

Student: Christen McLaughlin, Suffolk University 

Small Business: Naked Feet Yoga

Naked Feet Yoga

My favorite local business is a yoga studio called Naked Feet Yoga. I was never interested in yoga until I started regularly attending this yoga studio. I started taking yoga classes when I was trying to work on my physical fitness and thought some classes would be a great way to increase my core strength and stamina and would be a lot more interesting than just a regular gym work out. Once I started attending these classes I realized how much I love yoga and it improved not only my physical health but my mental health and emotional well-being.

Are you an Aspiring Entrepreneur? Here Some Tips from Small Business Experts

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Tips for Aspiring Entrepreneurs from Small Business Experts

Q&A with Susan Lamping, VP of Sales, and Chuck Sinks, Senior Business Advisor at CDC Small Business Finance, a nonprofit small business lender.

Not everyone has what it takes to be an entrepreneur. According to Chuck Sinks, of CDC Small Business Finance, we should all have “tremendous respect for the risk, sacrifice, uncertainty, stress and the ‘make or break/ it’s all on the line’ decision-making entrepreneurs engage in.”

We spoke with Susan Lamping, Vice President of Sales at CDC, and Chuck Sinks, Senior Business Advisor, about the difficulties that entrepreneurs have to overcome when they are starting a business.

Why It’s Hard to Meet Lender Requirements

One of the first challenges that entrepreneurs have to face is getting access to capital. Lamping shared with us the most common reasons entrepreneurs fall short of meeting lender requirements. Typically, she says these are due to cash flow, credit or length of time in business. She explains that “lenders often want to see that entrepreneurs have enough cash flow to meet their existing business and personal obligations as well as the new debt service, and still have a small cushion left over,” which is something that many businesses don’t have. Another deterrent to access to capital is credit, since “many of the larger banking institutions are seeking credit scores upwards of 680 with no or minimal blemishes from the past.” It is also challenging for start-ups to get financing since a lot of lenders want to see at least two years in business, and some will not consider start-ups at all.

Solving Early Challenges

Chuck Sinks has been around small businesses his whole life, “involved in one way or another with the start-up’s, owning, operating, purchasing, turning-around, and selling.” He started working at CDC Small Business Finance in 2010 and says advising at-risk small businesses during the recession was “incredibly rewarding.” He typically approaches challenges by figuring out whether the business decision at hand is going to “make money, save money or save time.” This approach allows him to narrow down the options quickly and start solving the problem. He says that “it’s not always easy, and we don’t bat 1000…but if we stay at it, working with the business owner, we can usually get to a satisfactory or better outcome.”

One of the early challenges that Sinks sees in a lot of small business is bookkeeping. He says, “good, reliable bookkeeping seems to be a shortfall for many small early stage business owners. Reliable operating financial statements help business owners make fiscally sound tactical decisions day in and day out.”

Advice for Aspiring Entrepreneurs

We asked Sinks what he thinks aspiring entrepreneurs need to understand about the risks associated with starting a business, and he gave us a list of 7 things entrepreneurs should consider.

  1. Ask yourself “can I tolerate the risk for the reward or outcome I’m after” before you take the plunge into business ownership- there could be a heavy price for overestimating one’s tolerance for risk
  2. Write a well-thought business plan, including candid financial projections and market analysis- it’s magic when you write things down
  3. Have sufficient capital
  4. Be optimistic— “a ‘no’ from a potential customer today means you are now one ‘no’ closer to a ‘yes’ from a customer tomorrow”
  5. Be flexible; if the market is telling you to change; listen, confirm and act
  6. You will lose a little stomach lining along the way, make sure you have plenty when you get started
  7. Remember where you came from; give back, help out and share what you have learned

Evaluating Alternatives for Small Business Debt Capital

Sinks told us about a simple graph that CDC has developed to evaluate the various alternatives for small business debt capital. In this graph, the X axis is Effort and the Y axis is Cost, and they are inversely correlated. He explains that Small Business Administration (SBA) loans involve effort, but have a low cost of capital for early stage small businesses. On the other hand, Merchant Cash Advances (MCA), which is when a small business’s credit card service vendor makes a cash advance to the business and takes a percentage of the daily credit card swipes, is very easy to get but the cost of capital is very high. The Annual Percentage Rate (APR) – often upwards of 30% – is usually “very opaque or just not disclosed by the MCA lender.” So, Sinks recommends always making the effort to secure low cost debt capital.

 

Small Business Story: Cantler’s Riverside Inn Faces Risks During the Off-Season

The CoverWallet Small Business Scholarship encourages entrepreneurship in students by asking them to take on the perspective of a local small business owner. Students share their perspective on the opportunities and challenges faced by a business in their community.

Student: Heather Tinsley, Technical College of the Lowcountry

Small Business: Cantler’s Riverside Inn

Cantler's Riverside Inn

A favorite local business back home for me would be a restaurant that sits on the river and serves a local favorite, steamed crabs. They make everything from scratch and even catch and steam the crabs in house. Some risks they may face would be location and weather, seeing as the restaurant is situated on the water where many customers ride in by boat. Depending on how the weather is outside can seriously affect their business, since the majority of people going to this restaurant want to sit out on the deck and pick crabs, and do not want to do this in the cold or rain. This can also affect their crab catch for the day, especially when it is winter and no longer crab season.  To fix the risk of having winter interfere with the amount of crabs they serve, they outsource and get crabs from Louisiana in the off-season. The crabs from home are better, but crab-catching season has to end to help replenish the crabs for the next summer.

Small Business Story: Aaron Law Firm Describes Advantages and Disadvantages of Owning a Small Business

The CoverWallet Small Business Scholarship encourages entrepreneurship in students by asking them to take on the perspective of a local small business owner. Students share their perspective on the opportunities and challenges faced by a business in their community.

Student: Jackson Aaron, SUNY Plattsburgh

Small Business: Aaron Law Firm

Aaron Law Firm

A local business has always been at the forefront in my life. Since a young age, my father has owned his Law Firm. He has been in practice since the early 2000s since earning his Doctorate in Law in 1997. He handles mainly criminal defense work, but he also does Wills/POA’s, small business law, and typical lawsuit works. I have seen him struggle and strive while being at the helm. Being a small business owner has its perks. He makes his hours, decides how much he gets paid, and receives different tax exemptions because of it. He also works with other small businesses around our community providing legal work like contracts, incorporation, or even litigation. Along with being a part of the Alabaster Industrial Development Board, he uses his small business status to not only benefit and promote himself but other small businesses as well as our city.

Small Business Story: Beaverton Dance Center Overcomes Risks Following Rebranding

The CoverWallet Small Business Scholarship encourages entrepreneurship in students by asking them to take on the perspective of a local small business owner. Students share their perspective on the opportunities and challenges faced by a business in their community.

Student: Avery Turner, University of Oregon

Small Business: Beaverton Dance Center

Beaverton Dance Center

Beaverton Dance Center is a locally owned and operated dance studio at which I have been a student for twelve years. In the dance world, reputation is everything. Since my studio changed ownership six years ago, there has been a concerted effort to rebrand it. The previous owners were the Billings family and they had named the studio Billings Dance Center. They ran the studio as primarily a recreational facility with very little emphasis on competition. This was perfect for many young dancers like myself at the time who were just interested in learning and getting good exercise. However, this created a reputation in the dance community for the studio that was not in line with the vision of the new owner when he took over in 2011. The new owner just so happened to be my neighbor and a current faculty member.

Small Business Story: Volo Sportsplex Manages Seasonality of Demand and Other Risks

The CoverWallet Small Business Scholarship encourages entrepreneurship in students by asking them to take on the perspective of a local small business owner. Students share their perspective on the opportunities and challenges faced by a business in their community.

Student: Madeline Maze, Northern Illinois University

Small Business: Volo Sportsplex 

Volo SportsplexToday I will be talking about a family owned business where I work. The business’s name is “Volo Sportsplex” and it is a sports complex located in a small town about one hour and thirty minutes north of Chicago. In this facility there is one main gym that has one regulation sized futsal field, two regulation sized volleyball courts, one regulation sized basketball court, two regulation sized pickle ball courts, two drop down batting cages, six drop down basketball hoops, and a drop down curtain to divide the gym in half. There is also a concession stand located in the gym. There are two restrooms located in the lobby. Upstairs at the Volo Sportsplex is a sitting area with a TV and a vending machine for drinks, a dance studio with mirrors surrounding the walls, and a multi-purpose room with a sink, microwave, and fridge. This sportsplex is managed by one manager and has four hourly employees who clean the facility and help the programs and registration run smoothly. It is such a nice and clean facility and is great for the area because there are no other sports complexes. Although this is my favorite local business, it does face many problems.