Venyu Blog

I know it’s caricature to think of every insurance man as Ned Ryerson slumming for business in Groundhog Day but honestly there’s no getting around it. If you have something to protect, an insurance agent has just the premium for you to buy: Fire, theft, auto, home, life, death and dismemberment, assorted NASA satellites, whatever.

But really, as if the insurance industry doesn’t already have enough on its plate — for example, weighing claims from policyholders impacted by Hurricane Irene — comes news that the preternaturally paranoid underwriting types that comprise its bedrock have come up with a new way to hustle your company courtesy of a policy squarely aimed at the cloud computing community: Data breach insurance.

You heard right. Insurance that compensates your company for data loss due to misadventure in the cloud (a lost USB, laptop, etc.) or data excision deliberate or otherwise by current (or former) employees.  Of course the catch being you pay the premium, the insurance company devalues its worth for pennies on the dollars. Oh, and by the way, that data remains lost, insurance policy or no insurance policy.

In this article from the e-zine Property Casualty 360 reports the Hartford (Insurance) Group is offering an endorsement to the company’s Spectrum business-owners’ policy which provides coverage for expenses and legal liability as well as access to services to help comply with regulations and customers’ concerns, such as how to notify customers, craft letters and perform credit monitoring.

“So far the feedback from our agencies has been positive and we’ve learned the awareness of this is not pronounced,” says Holly Moriarty, marketing director for Hartford small commercial insurance. “Response is critical and it could be complicated, with different regulations requiring different responses in each state,” Moriarty explains.

And, of course, there’s the old fallback of…“Customers are important to any business, but with small business, many times they think of their customers as extended family,” Moriarty says. “Relationships are formed. You know their names and faces. They don’t want to jeopardize that relationship.”

Now, in all fairness, according to this article found in Network World, The Hartford’s policy pays the cost of responding to a breach, including legal and forensic measures. It also pays for notifying those whose data was affected, crisis management and the cost of advertising breaches. It also covers legal defense and liability such as civil awards, settlements and judgments policy holders are legally obligated to pay.

Part of the coverage includes access to a Web site on being prepared for breaches. This offers advice about protecting customer, patient and employee personal information and mapping out a plan for responding to incidents. It also provides a state-by-state library of data-breach regulatory requirements.

The policies also include consulting to help with notifying appropriate parties about breaches and obtaining credit-monitoring services for people whose data was compromised and are in danger of identity theft and fraud.

The Hartford has partnered with Identify Theft 911 to provide policyholders with risk management advice to protect against data breaches, Moriarty adds.

The coverage, said Moriarty, could be beneficial to restaurants and retailers as well as businesses that store client or patient data, like those in healthcare, financial or professional services.

There’s nothing in the article that spells out the cost of the premium or anything like that but here’s an even better idea where you pocket the amount of the premium and still get to keep your data protected. The best data insurance policy you can have is online data backup and recovery from Venyu. No insurance agent required. Ever.