Fire was once the primary reason why businesses bought insurance in Canada. Within three to five years, the insurance industry expects that the exposure to data and privacy breaches will emerge as the top risk to insure against.
Privacy breaches at Sony, Target and JP Morgan top the business headlines. Less visible is the 36% of all Canadian business that have already been hit by a cyber-attack.
The Insurance industry has been responding with unique and highly customized products to protect small to mid-sized Canadian companies. The insurance industry refers to these policies as Cyber Liability policies.
Different from most traditional risk transfer products, these highly customizable policies can provide policyholders with first party protection for expenses associated with:
Fortunately, Canadian companies have not been the target of large-scale class action lawsuits as a result of a privacy breach. Given our increasingly litigious environment, it is only a matter of time before a small Canadian company becomes top news as a result of a class action suit resulting from a privacy breach. The Cyber Liability policies can cover liability arising from a privacy breach or from information posted electronically.
President, LMS ProLink
Derrick Leue: Honours B. Comm from McMaster University; Registered Insurance Broker (Ontario)
Derrick has been delivering risk transfer advice to the marketing research industry for over 10 years. Derrick’s firm, LMS PROLINK Ltd., has been the manager of the Commercial Insurance program for the MRIA since 2005.