Community associations do a lot of good for their neighborhoods, but they can accidentally inflict harm if they experience a cybersecurity breach. These organizations store sensitive community member information, which hackers may target. While the chance of this happening may seem small, board members must take precautions by purchasing cyber risk coverage. Fortunately, insurance agents are in a perfect position to help associations keep their systems safe from cybercrime.
Why Cyber Risk Coverage Matters
Many businesses hit with cybercrime have the resources to recover, as they’re large corporations with established cybersecurity departments. Community associations, on the other hand, have limited funds, and all roles may be on a volunteer basis. It’s improbable that such a small organization will have the expertise to help neighbors recover from the damages of identity theft:
- Negative impacts on credit
- Illegally accumulated debt
- Drained bank accounts
It can take years for individuals to repair their lives, especially if they don’t have the support usually provided after a breach. For example, most big companies offer customers free credit monitoring services so they can catch unauthorized purchases as soon as possible.
How to Find the Right Cyber Liability Insurance
When looking for insurance, it’s essential to consider cyber risk coverage for community associations specifically. Due to their small size, these organizations have unique needs:
- Assistance bearing the cost of an investigation
- Help alerting community members to the breach
- Aid with figuring out their next steps
Larger enterprises may already have relationships with public relations or security firms, but community associations likely don’t have these connections. Fortunately, cyber risk coverage can provide for these expenses.
To find the best cyber liability insurance for its needs, a community association should keep the following in mind:
- Whether the organization has legal obligations to protect personal data
- How and where the association stores data
- What a policy does not cover
Insurance agents can assist by asking probing questions to ascertain their customers’ needs. It’s also crucial to stress that while cost is essential, choosing less coverage for purely frugal reasons can lead to more expenses later.
How Community Associations Can Minimize Risk
Even if community associations maintain cyber liability coverage, they must still take precautions to prevent a breach. For example, board members can agree to a privacy policy that restricts them from sharing community members’ personal information or giving system access to unauthorized individuals.
Associations should also create guidelines for device management. Are board members allowed to access the system on personal devices? What happens if a device containing sensitive information, system access, or saved passwords gets lost or stolen? Answering these questions before the situation arises ensures speedy action and limited damage.
How Cyber Risk Coverage Impacts Board Members
When a cybersecurity breach happens, trust in the organization tends to plummet, regardless of its initial efforts to prevent such an event. Neighbors may call for board members to resign or otherwise face accountability.
One avenue may be the civil court system. Those affected may file a lawsuit against the board, which can devastate the association and individual board members. Cyber risk coverage funds legal fees, allowing the organization and members to fight suits without going bankrupt.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.