In February, Anthem, the second-largest U.S. health insurance provider, confirmed that it had suffered a data breach that resulted in the exposure and theft of the personal information of up to 80 million current and former customers and employees. Hackers accessed the database that held this information by using a stolen password.
Fortunately, Anthem does have a cyber security insurance policy in place that covers up to $100 million in losses. But the large amount of individuals affected by this attack is expected to exhaust the policy, since Anthem intends to notify each person. Therefore, if Anthem exceeds the limits of its policy, it will be responsible for the additional costs.
The fact that Anthem is a large company does not mean it was more prone to a data breach. Companies of any size need to be prepared for the threat of a breach with proper cyber liability coverage because data breaches are costly. According to the Ponemon Institute’s 2014 Cost of a Data Breach Survey, the average per record cost of a data breach was $201 in 2013; the average organizational cost of a data breach was $5.9 million.
Contact Warren G. Bender Co. to discuss your cyber insurance options.