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

 

 

 

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