One of NAPLIA’s long-term clients recently received a competitive quote from another agency for their accountant’s professional liability insurance. The quote was $170.00 lower than their existing premium. Despite a discussion with the client regarding policy differences and the benefits of their existing program, the insured elected to go for the minimal premium savings.

They stated they were comfortable with the new agent’s representation of the coverage “being equal”.

Two months into the policy, one of the accountant’s laptops, which contained confidential client information, was stolen from their office. The theft occurred over a weekend and was not discovered until Monday morning.

The accountant called his new agent and was informed that there was coverage in place, but to a limited extent. The agent provided the accountant with the carrier’s toll free hotline to get additional information and support. The additional information amounted to a single piece of advice; secure local legal representation, at the accountant’s expense, to determine the extent of the security breach.

At a loss, our former client remembered the discussion with our office regarding Identity Theft coverage and called our office.

Although no longer a client, NAPLIA was able to assist the accountant with the following:

• NAPLIA provided the accountant with their specific state’s security breach laws.
• Upon review of the relevant state security breach law, NAPLIA determined that under the relevant circumstances, they were only required to notify any client whose personal information was not encrypted in a reasonable manner. 
• NAPLIA provided a sample security breach letter that the accountant could use to send to these clients.
• NAPLIA provided the accountant free access to our Attorney / CPA to assist him with additional questions.
• NAPLIA explained the difference between “first party” and “third party” liability relevant to a client data breach.
• NAPLIA reviewed their current policy and determined their first party coverage was limited to $1,000.

In hindsight, the accountant requested that we review the difference in coverage between the policy they had with NAPLIA and their new policy.

The policy they left with NAPLIA provided $25,000 for first party Cyber Liability in comparison to the $1,000 with their new policy.

The accountant had moved their coverage to save $170, and within two months realized that NAPLIA’s resources and service alone negated the premium savings. In addition, the new policy was not “equal” to their previous coverage leaving them with significant exposures.

The moral of this real story is to understand that not all polices are the same and coverage does indeed matter more than premium savings.