Digital data protection
3 November 2008
Dumpster diving, hacking and laptop theft are just three of the activities that Aegis and Lloyd’s insurance group Hiscox are offering protection against in a new product that covers a range of privacy and confidentiality risks.
Bermuda-based energy mutual Aegis, which is parent to Lloyd’s managing agency Aegis London, is offering access to the Hiscox Privacy Protection Policy to the 400-plus power and utility companies that make up its membership.
The policy provides cover for liabilities arising from data losses and resultant breaches of privacy, as well as the notification costs to people affected.
Aegis says the partnership comes amid growing awareness of the exposures presented by new technologies and the increasing volume of sensitive data held by organisations.
Marcus Alldrick, Senior Manager, Information Protection & Security at Lloyd’s, says this type of partnership is an important development in the insurance sector’s efforts to aid companies to address the issue of digital data loss.
“The quantity and detail of data stored by firms is constantly increasing,” says Alldrick. “And there’s a growing criminal market for such data, which makes it valuable to those who seek to obtain it. It’s an increasingly important issue and firms can’t ignore it. They could choose to simply accept it—but that’s not permissible in the eyes of the regulators and the public—or they can seek to manage the risk. They can do that by reducing the likelihood of it happening and by taking out insurance to meet the costs if it does occur.”
Alldrick says it’s not only a targeted criminal attack that can leave firms exposed. Mobile devices, such as memory sticks and laptops, present a potential data loss risk if they’re stolen or merely mislaid.
“However the data is lost, it throws up a considerable cost to the company,” he says.
In the event of such a loss, firms have to identify the data type and then inform affected clients and customers about the issue. Those tasks, along with shoring up a company’s reputation, can be costly.
“Regulated firms will also need to investigate how the loss occurred and put in place safeguards to ensure there’s no repeat,” says Alldrick. “Regulators will want to make certain that adequate checks are put in place; and, as we’ve seen in the past, large fines can result.”
Alan Maguire, President and CEO of Aegis, says: “We felt the time was right to provide more robust cover for this type of risk. We chose to partner with Hiscox because of its acknowledged reputation in this field and the skill of their dedicated technology underwriting team.”
Oliver Brew, Vice President of Hiscox, adds: “The members of Aegis are precisely the type of utilities and energy companies that are required to hold considerable volumes of customer data and other highly sensitive information, thereby exposing them to a high privacy risk. With electronic crime and data breaches on the increase, this is a timely move.”
Last updated on 05 Jan 2010
