"

Estimated reading time: 3 minutes, 4 seconds

Cyber Insurance Gains Traction

Jim Piller, Margolin Winer & EvensIt is impossible to miss news stories about breaches of data at companies, particularly at large, well-known organizations. And because of the threats of loss of or improper disclosure of data, the need for firms to purchase cyber liability insurance is receiving a notable uptick in the discussion of the need for this coverage by ndustry experts.

 "I was originally not a fan of cyber insurance," Randy Johnston, a partner with Network Management Group and K2 Consulting, told an audience at the recent CCH Connections Conference. But now, he continued, "I have been committed to cyber insurance policies. Your professional liability insurance will not cover you with you have a cyber breach."

The same message was delivered at the conference by Jim Piller, a principal with New York City's Margolin Winer & Evens. He noted the risks associated with improper disclosure or lost of client data. For example, he cited Florida's breach law.

"If I have one K-1 involving a Florida partnership, if I have one client who lives in Florida, I have to abide by the law," Piller said

Many insurance carries offer cyber liability insurance. However, it is generally not offered as standard coverage.  "Endorsements to the CPA firm's commercial insurance policy may be available," according to Scott Spiegel, CFO of the American Institute of CPAs. "In addition, a CPA firm, through its professional liability policy, may buy extended coverage for cyber-related damages to client's network or equipment caused by the CPA firm."

Cyber liability insurance coverage is available through the AICPA Professional Liability Insurance Program, which is endorsed by the AICPA and provided through Aon Insurance Services, the insurance broker and national program administrator.

Cyber liability coverage was recently introduced as an endorsement option for the CPA Value Plan, through what is called CPA Net Protect. Overall, " Currently, we have more than 1,000 firms with the endorsement with growth coming over the last two to three years as cyber awareness has increased," Spiegel says.

Cyber liability insurance is not yet available through Camico, which is endorsed by 15 state CPA societies, including those in California and New York. While no details are available, the company anticipates having a program available by April when a major policy rewrite is expected to be unveiled.

Piller noted that while cyber liability insurance is not expensive the risk of data breaches can be. He noted firms need "to ramp up cyber security in order to avoid possible reputation damage and heavy fines associated with the failure to comply with the law."

Johnston believes that the risks of disclosure of public health information is a particular problem. "I believe all firms have HIPAA information," Johnston told CCH attendees. He said that includes names, telephone numbers and email addresses of clients.

Besides establishing policies to protect data, Johnson said organizations need to ascertain what kinds of data they have. "Organizations should consider creating and inventory of the types of data that they store," he said.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Read 5464 times
Rate this item
(0 votes)

Visit other PMG Sites:

Template Settings

Color

For each color, the params below will give default values
Tomato Green Blue Cyan Dark_Red Dark_Blue

Body

Background Color
Text Color

Header

Background Color

Footer

Select menu
Google Font
Body Font-size
Body Font-family
Direction
PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.