We hear it all the time from auto dealership owners. "Why do I need Cyber Liability Insurance?" or "No one is going to hack into my dealership." Unfortunately, businesses of all types and sizes are compromised daily. And it's not just by hackers. Many of the security breaches that occur are due to employees, vendors or unprotected data on the dealership premises. Consider these examples:
- Two men broke into the San Francisco Bay area Sonic Automotive, the nation's 5th largest auto dealership group, and stole files containing the financial information of many customers including credit reports, bank statements and social security numbers.
- A man, who worked as a salesman for Asbury Automotive in Orlando, was charged by the State of Florida for participating in an identity theft ring. Allegedly, the man gave the financial information for dealership customers to other members of the identity theft ring.
- A Ford dealer in New Hampshire reported losing a backup computer tape which contained names, addresses, social security numbers and driver's license numbers of its customers.
- Files purportedly belonging to a California auto loan company, Alliance Direct Lending, which works with auto dealership partners to help car owners refinance, exposed customer information including names, addresses, partial social security numbers and credit scores on an unsecure online database. The leaked data contained 5,000 to 10,000 records as well as the names of 114 car dealerships located across the country including California, Colorado, Florida and Massachusetts.
What's at stake? Your dealership's reputation for one. Consumers do not hold the thieves or hackers responsible for the loss of their personal information - they blame the business. When Target Department Store suffered a data breach and lost millions of customer's personal information in December 2013, consumers were outraged - at Target! In a recent survey over 80% of consumers said they would not buy another vehicle from a dealership that had compromised their personal data. While your reputation and the trust of your customers is priceless, there are also other expenses and time consuming consequences of a data breach. One of the biggest is notifying all customers who are potentially affected by the breach. Where would you begin?
Implementing a cyber-security plan is helpful in limiting your dealership's exposure. Having security procedures in place that lower your risk of exposing personal information will make cyber liability insurance more affordable.
What action should you take?
- Conduct regular audits to look for areas of exposure
- Provide adequate employee training and update policies and procedures for password and privacy protection, permission settings to access customer or personnel information, and deleting access for terminated employees.
- Carefully review all vendors with potential access to protected data and make sure that they are contractually required to protect any sensitive information. Consider cloud technology companies as they typically have the resources to provide redundancy and data protection.
- Secure the dealership buildings. If your computer network is onsite, insure that the server and any backup tapes are locked and secure.
Of course, there is no such thing as 100% security, but as Boulton Fernando, chief information security officer for Toyota Financial says, "if there are two laptops on a table, and one is locked and the other isn't, chances are the unlocked one will be stolen."
How does cyber liability insurance help? Even if you never have a claim, cyber insurance provides proactive services to assist you with your cyber security. The insurance carriers provide risk management and resources to minimize vulnerability. Each carrier has variations in coverage and limits which can be tailored to your needs. Some of the coverages include computer services, legal services, public relations, notification services, identity monitoring, third party coverage, regulatory defense, fines and penalties and business interruption. And don't forget peace of mind. With cyber liability insurance coverage, if your dealership experienced a data breach, you would know where to begin...with a call to your insurance carrier.