As cyber threats continue to evolve, businesses of all types are facing the consequences of taking a cavalier attitude towards cyber security. Even HOAs, who might assume they’re safe from these threats, are seeing an uptick in attacks. While these associations are typically small, hackers might assume that these networks are not adequately secured, and therefore easy to breach. In most cases, they are not wrong. HOAs possess plenty of confidential data from their residents, making them an easy target. Therefore, read on to discover how to protect your operation and secure it with an LA HOA Insurance package, complete with Cyber Liability coverage.
Should our HOA purchase cyber liability insurance?
Allocation of funds can be difficult to manage in HOAs, especially as budgeting often doesn’t leave a lot of wiggle room. However, reserving funds for cyber security is not an option, it’s a requirement. Recovery from floods, earthquakes, and other disasters typically take precedence in HOAs. However, the total cost of recovering from a breach exceeds those disasters by more than double.
Maybe your board thinks that your association won’t be hacked again because it is small. But the reality is that cybercriminals often target smaller enterprises precisely because they are lax on cybersecurity. In fact, 62% of data-breach victims are small-to-midsized enterprises that incur an average of $38,000 in related costs, according to the 2016 Internet Security Threat Report from Symantec, a provider of security software, explains the LA Times.
A breach doesn’t only affect your association. In fact, under California Civil Code section 1798.82, a party that is victimized by a data breach must provide notice and offer mitigation services to those affected by the breach. To the extent that the breach involved data from residents outside of California, the association will need to make disclosures under data-breach notification laws in those other states too.
Speak with a trusted insurance advisor and a cyber security expert to determine your exposures and acquire the necessary coverage to mitigate loss. The worst thing any HOA can do is turn a blind eye to cyber-crime.
About Scott Litman Insurance Agency
At Scott Litman Insurance Agency, we are dedicated to protecting HOAs like yours. We have a unique understanding of the industry and the common risk exposures that you face in your daily operations. In fact, we find that 90% of the policies we review are missing coverages that violate the Covenants, Conditions, and Restrictions (CC&R), exposing the board, HOA and management to lawsuits – which is why our comprehensive policies are tailored to meet your specific needs at competitive prices. For more information about our products, contact our experts today at (818) 879-5980 ext. 201, or fill out our online form.