During my travels, speaking to many Process Server and Private Investigation Associations, I'm confronted with the inevitable statement "I don't have employees and I don't use Subcontractors. I'm a one person shop and handle all of the work myself. I am NOT going to get sued." There are those of us that believe in insurance as a means to protect our financial stability; and of course, there are those of us that do not. As an Insurance and Risk Management Professional, I can tell you that claims in this profession DO occur and they can range from a few thousand dollars to over a million.

A number of claims come from frivolous law suits. I know, as I was the victim of one. In 2004, I was served a Summons and Complaint in a Personal Injury lawsuit, naming myself, my marital community and my corporation as Defendants. The Plaintiff was acting Pro Se and was a Legal Secretary at a large Seattle Law Firm that happened to be a client of mine at the time. The complaint alleged that a Subcontracted Bicycle Messenger, working on my behalf at the time of the accident, hit her in a crosswalk, throwing her 10 feet backward; whereby she hit her head on the cement, was knocked unconscious and subsequently ended up in the Emergency Room with long standing injuries. To make a long story short, while you can most definitely be sued due to your Subcontractor's action(s), the accident never occurred. Here I was in the middle of law suit, whereby damages never even took place!

Since I had insurance, I was able to pay a small $500.00 deductible, file a claim and have my Carrier represent me in court. I was dismissed from the case, along with my marital community and my corporation (as all entities were covered), but in order to cross that finish line, the Insurance Company paid out over $30,000 to defend me; that money would have come from my own pocket had I not been properly insured.

The above story can translate to a number of alleged losses in your profession. By carrying the proper insurance coverage, your Defense cost will be paid by the Carrier (as well as any financial jugement) and not by you. Now ask yourself, "Is Insurance really that important?"

CYBER SECURITY LIABILITY

In today's world of technology and information, you may wish to consider the liability issues surrounding your data and storage. The average cost of a data breach is $204 per lost record, with more than half of such costs attributable to lost customers and associated public relations expenses to rebuild an organization's reputation (Ponemon Institute, 4/2009 Global cost of a Data Breach Study) The examples that follow illustrate situations in which the costs incurred to remediate a data breach were significant.

Unauthorized Access
An international computer hacking group gained access electronically to the computerized cash registers of a restaurant chain and stole credit card information of 5000 customers, starting a flood of fraudulent purchases around the world.

Theft of Digital Assets
A regional retailer contracted with a third party service provider. A burglar stole two laptops of the service provider containing the data of over 800,000 clients of the retailer. Under applicable notification laws, the retailer - not the service provider - was required to notify affected individuals. Total expenses incurred for notification and crisis management to customers was nearly $5,000,000.

Human Error
A non-profit community action corporation printed two 1099 forms on one piece of paper. An employee was supposed to separate the forms and send each to its rightful owner. Instead, on person received both copies. The mistake sent tax forms and social security numbers to strangers. Approximately 50% of the landlords who work with the community action corporation received their forms in addition to the private information of the others.

Cyber Extortion Threat
A U.S. based information technology company contracted with an overseas software vendor. The contracted vendor left universal "administrator" defaults installed on the company's server and a "Hacker for Hire" was paid $20,000 to exploit such vulnerability. The hacker advised if the requested payment was not made he would post the records of millions of registered users on a blog available for all to see. The extortion expenses and extortion monies are expected to exceed $2,000,000.

Human Error
An employee of a private high school mistakenly distributed via e-mail the names, social security numbers, birthdates and medical information of students and faculty creating a privacy breach. Overall, 1,250 individuals' information was compromised.

Malicious Code
A juvenile released a computer worm directing infected computers to launch a denial of service attack against a regional computer consulting & application outsourcing firm. The infection caused an 18 hour shutdown of the entity's computer systems. The firm incurred extensive costs and expenses to repair and restore their system as well as business interruption expenses which totaled approximately $875,000.

Just because your particular genre of business is not named in the illustrations above does not mean you immune to risk and a similar scenario. Private Investigation Agencies, Bail Agencies, Fugitive Recovery Personnel, Process Service Agencies, Law Firms, etc are just a few additional classifications of business that store private information in their databases.

Cyber Liability Insurance is a cost-effective way to mitigate the financial damages caused by a breach.

Can you afford NOT to be covered?
Call 855-356-0875 or email eskov@pacificcig.com for a no obligation quote today!