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Data breaches have become the new normal, and obtaining cybersecurity insurance is important for local businesses that have any personally identifying information like credit card numbers or Social Security numbers from employees or customers stored in their records, local insurance experts say.
John Bouchard, vice president of Polestar Executive Management, a specialty division of insurance broker Brown & Brown Insurance, says that cybersecurity insurance is not just for large businesses and not-for-profits.
"It's an important coverage for smaller businesses and organizations," Bouchard, an attorney-turned insurance broker, says. "People say, 'Gee, we can't afford it and why would anyone hack us?' The statistics bear it out that either a small business or small nonprofit is considered lowhanging fruit to hackers."
The nonprofit Identity Theft Resource Center tracked 1,244 data breaches in 2018. While the ITRC saw a decrease in the number of breaches from 2017, it saw a 126 percent increase in the exposure of records that contained personally identifiable information last year.
Bouchard says a small business can buy $1 million in cybersecurity insurance for $4,000 or $5,000 in premiums per year.
Rhett VanScoter, president of independent insurance agency VanScoter Insurance Agency, says that small businesses can get a small amount of first-party coverage on their standard business insurance policy for the damage or corruption of their Internet servers from viruses to replace their servers and re-create their data.
Bouchard notes that courts have ruled that cybersecurity...