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5 Reasons Your Organization Should Consider a Cyber Liability Policy

By April 3, 2019June 12th, 2024

I went fishing with my grandson recently and we caught a few small perch and laid them carefully on the grass. As they lay on the ground, they barely moved where just minutes before we could see them swimming in the small pond with vigor; darting this way and that. My granddaughter, ever the “animal lover,” tried to talk to them and tried to help them adapt to their new surroundings. But despite everything she tried, nothing changed. Finally she pleaded with me to put them back in the water – they were just not doing well in their new world.

Like a fish out of water, I’ve found myself with that same feeling as I’ve tried to adapt to the challenges of a new world known as Cyber Liability. But unlike our little fish friends, we must adapt to new changes and to a new world. We must also consider the risks associated with those changes. For years, the bottom line pledge of our agency has been to Protect Your Ministry and so with that continued purpose in mind, please allows us to share just a few tidbits of information on a new area of risk that you need to be keenly aware of – Cyber Liability.

Computers are obviously a part of our world. If they are down, well it’s just time to go home! But beyond their obvious usefulness, we have to be aware of how much damage can be done if the security of your ministry’s computer is compromised. While we’ve seen major retailers impacted already in this area with significant financial ramifications, we must also realize that small business (including churches and non-profits) are also valid targets. That may at first seem far fetched, but just this year we’ve seen numerous first-hand attempted cyber crimes and breaches on accounts you’d deem to have solid firewalls and other protections in place.

With all of that said, here are 5 Reasons your organization should consider a cyber liability policy:

  1. Social Media – As social media plays an increased role in connecting churches and nonprofits to their members and guests, new avenues are created for libel, slander, defamation, and other forms of disparagement. Growing concerns even among websites and blogs include the unauthorized use of photos, copyright infringement, and prayer lists.
  2. Breaches – Computer breaches can be expensive! Breach notification laws and required forensic analysis can cost an organization thousands (average cost per record is about $150.) Breaches can be brought bout by the work of hackers or simply the loss of sensitive information via stolen or lost laptops, tablets, or smartphones. Data that churches tend to carry that are of interest to hackers may include:
    1. Highly sensitive financial information
    2. Bank account information
    3. Credit card data
    4. Employee benefits information
    5. Social Security numbers of employees/volunteers
    6. Medical information or history of any church member that is often obtained for mission trips or youth activities and comprised via a data breach or the theft or loss of a laptop
    7. Student record information
  3. Cyber Extortion- Extortion is defined as an attack or threat of attack coupled with a demand for money to avert or stop the attack. It can take many forms but in recent years, cyber criminals have developed ransomware which encrypts an organization’s data. The extortionist’s victim typically receives an email that offer the private decryption key in exchange for a monetary payment.
  4. Cyber crime is Growing Rapidly – Experts  are beginning to warn that smaller organizations, including churches and similar groups, increasingly fall victim to cyber crimes and other online challenges.
  5. Coverage Gap – Cyber Liability events are generally not covered under most general liability policies.

Perhaps you remember an old sci-fi movie from the 70’s called Strange New World. Maybe that’s where we’re at, but one thing seems clear – we definitely have to look at things differently than we did even just last year. In doing so, you’ll best protect your ministry and its purpose. Ultimately that’s our challenge.

Gary Benson

Gary Benson has been an agent for over 40 years, primarily serving churches and nonprofits. He is the agency principal for The Woodlands, TX office of Insurance One.