McGowanPRO Professional Liability Blog / Resources / Articles

Personal information (social security numbers, credit card numbers, bank account numbers, even name and address) has become a leading target of cyber criminals.  With your client's personal information in your possession, understanding your state privacy laws and having a timely response plan is essential.

So, what do you do if you have a Data Breach and some of your client’s personal information is compromised?

First, review your State Security Breach Notification Laws.  At this time, all but four states (Alabama, Kentucky, New Mexico, and South Dakota) have enacted Data Breach Notification Laws. 

See State Security Breach Notification Laws (http://www.naplia.com/resources/state_security_breach_laws.shtml)

Second, determine who should be notified:

• Law Enforcement
  • When the compromise could cause harm to a person or business, you should first contact your local police department.
• Your Insurance Carrier
  • Your insurance policies likely state that if you are aware of circumstances that could potentially lead to a claim you must notify them at your earliest convenience.  When in doubt, contact NAPLIA for assistance.
• Affected Businesses
  • The compromise may impact businesses other than yours including banks or credit issuers
• Individuals
  • early notification to individuals whose personal information has been compromised allows them to take steps to mitigate the misuse of their information.

The FTC has excellent resources to assist you in making these determinations and “Dealing with a Data Breach”,  http://www.ftc.gov/bcp/edu/microsites/idtheft/business/data-breach.html

For more information including a sample client notification letter visit our website, http://www.naplia.com/resources/identity_breach.shtml

Social Media has changed the rules

Social Media has become prevalent in our society and has the tendency to blur the lines between personal and professional exposure.  What your employees do on their personal time, or on personal website platforms while in your office, can impact you.  NAPLIA has developed specific guidelines for amendments to your Employee Handbook (www.naplia.com/social_media) and recommends every firm consider Employment Practices Liability Insurance (EPLI).

You are more likely to be sued by an employee than have a property loss

It’s a fact, you are more likely to be sued by an employee than have a property loss.  Yet, few firms would consider going without property insurance, while the percentage of firms that forego EPLI is significant.

Health or Benefit Reductions increase risk

Any reductions to employee benefits, including the reduction of 401k matching benefits, can increase the risk of EPLI claims. 

Economic slow down

Economic changes are rarely in our control, and unfortunately changes in the economy can directly impact your business.  It is a smart move to consider EPLI prior to having to consider any lay-offs, cut-backs, or changes to staffing.

Can you afford not to?

Over 60% of the employee liability claims filed annually are against small employers, and it is estimated that one EPL suit could bankrupt 50% of  small businesses without Employment Practices Liability Insurance.  Nobody likes to think it could happen to them, but with these statistics can you afford not to investigate insurance that could protect your business.