It is possible that your current restaurant insurance coverage has not kept pace with the rapidly evolving world of cyber liability. Cyber liability for restaurants is an area of risk that restaurant owners cannot overlook. According to Advisen, a New York-based commercial insurance research and data analytics firm, “exposures such as operational disruptions caused by denial of service attacks, lost or stolen data, violation of privacy laws and intellectual property infringement have long been a concern of larger companies. But this year, smaller businesses began to increasingly realize that they were also at risk.”
Outside of the recent news about the Target data breach , The Boston Globe had a restaurant cyber liability headline, Chain confirms it was source of breach affecting conventions . In summary, “A local restaurant chain confirmed Friday that its computer systems were breached, putting the credit-card information of thousands of customers at risk, including visitors who attended two major conventions in Boston.” A typical commercial insurance policy will not provide protection due to the above event.
Every restaurant that keeps electronic data and also uses the internet to conduct commerce or general business operations has a cyber liability exposure. Cyber liability losses can strike with little to no warning and leave you with tremendous cleanup costs from data recovery to rebuilding your restaurant’s reputation. For example, according to a 2009 Ponemon Institute Study, the average business loss from a lost laptop is $49,276 and most of that expense is associated with the cost of a data breach. Per the Boston Globe article the restaurant chain has not offered affected customers free credit monitoring services. If you carry cyber liability insurance protection would be available to offer those affected by a data breach credit monitoring costs. Our next article will explore the types of cyber liability coverage that are available.
This article was authored by Mark Strauss an independent Oregon insurance agent that specializes in working with restaurant and hospitality risks. Mark writes about all things insurance atwww.oregoninsurancedadvisor.com . If you would like to have me review your restaurant insurance coverage please call me at 503-922-4847.