A few weeks ago when America’s JobLink, a multi-state web-based system that links job seekers with employers, suffered a massive data incident, the sensitive data of thousands of job seekers in 10 states was exposed. After nearly 50 years in business, this was the first known intrusion into the company’s software, which is used to coordinate federal unemployment and workforce development in a number of states
While the long-term effects of this breach have yet to be experienced, it serves as a cautionary tale that any system can be vulnerable to a cyber criminal hacking.
“The broader insurance implications for them will be if one of their members, or several of their members, decide to pursue legal action against them for not sufficiently protecting their data,” says Jeremy Barnett, senior vice president of marketing with
NAS Insurance. “If it’s a class-action lawsuit, then that can lead to significant losses for the company.”
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With the risk of company losses ranging from financial and legal harm to reputational damage, how a company handles a cyber breach can have a substantial impact.
According to Barnett, following a cyber breach, there’s a requirement for a company to notify all those affected by the information leak. Often a costly expense, how a company responds both in public relations and in the notification process, can greatly impact the likelihood of a lawsuit down the road.
“[Notification] can help avoid some of those potential lawsuits that can be very expensive downstream if someone can demonstrate that harm has come to him or her as a result of their private information being breached,” he says.
Serving as another reminder of a cyber criminal’s willingness to exploit vulnerabilities in website security walls no matter the business sector, Barnett reminds brokers about the importance of advising clients with a digital presence, no matter the industry or focus, about the significance of cyber protection while evaluating what they may have in place to ensure its sufficiency.
“Brokers should be talking to their entire book of business about what kind of cyber protection they have in place because there really isn’t any particular industry or type of business that is a target – it’s every business because everyone is using computer systems in one way or another,” Barnett says.
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