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Scary cyber stories from the Business World

Don’t let a cyber incident destroy your client’s business! Check out these three claims examples of hacking, employee error, and multimedia liability to help explain cyber risks to your clients.

Employee error

A retailer emailed a group of customers to promote a sale with special discounts available to them. The retailer intended to attach a copy of the flyer detailing the discounts but instead attached a copy of a spreadsheet that contained a customer list, including customer names, addresses and credit card information.

As a result...
The retailer was required to notify all affected customers of the error and offered credit monitoring services. Several of the affected individuals began legal proceedings against the retailer. The notification and credit monitoring costs totalled $50,000, and the amount to settle the legal proceedings with the retailer’s customers combined with the associated legal costs and expenses totalled $100,000.

How CGU Cyber Defence would protect this client...
CGU Cyber Defence Insurance Policy provides coverage for breach of privacy which includes legal costs, indemnification of third parties and crisis management costs.

Hacker Attack

A transport company discovered its servers had been infiltrated by an unidentified third party, allowing the third party to access files. This included accessing personal identifiable information including credit card information. Unauthorised and fraudulent transactions were made on the transport company’s customers’ accounts in multiple states and countries.

As a result...
The transport company was required to notify all affected customers, their personal information had been compromised and offered affected individuals credit monitoring services. The transport company was also concerned about the possible reputational damage they could suffer, so a public relations expert was brought in to assist.

The breach resulted in costs and expenses of approximately $100,000 to identify the affected individuals, notify them, set up a call centre and respond to customer enquiries.

Another $150,000 was incurred in legal costs and expenses to determine reporting requirements and respond to regulatory investigations into the privacy breach. In addition $29,000 was spent on IT forensics costs incurred to restore the data and stop the breach, and a business income loss of $250,000 was also suffered – totalling $529,000.

How CGU Cyber Defence would protect this client...
CGU Cyber Defence provides coverage for all elements of the loss including customer notification costs, establishment of call centre for customer support, credit monitoring expenses, brand protection costs and business interruption loss.

Multimedia Liability
 
A hotel started a blog to convey information to customers and the public. The blog page contained a logo/image that was similar to a design that had been copyrighted by another entity. That entity sent a letter demanding the company remove the image. Negotiations between the parties failed and the other entity began legal proceedings against the hotel.

As a result...
The entity (plaintiff) demanded more than $5 million in damages. Defence costs and expenses incurred so far exceeds $1 million, and the case has not yet gone to trial, so it’s expected these costs will increase.

How CGU Cyber Defence would protect this client...
CGU Cyber Defence provides coverage for breach of copyright under the Multimedia Insuring Clause.

Read more cyber claims examples and about CGU's Cyber Defence cover at the CGU Cyber Defence microsite