Insurance news from Nationwide underscores corporate liability risk

Cyber Insurance policies commissioners industry

Cyber Insurance newsThe computer breach faced by the insurer highlights the chance of exposure from cybercrime.

The insurance news that revealed a computer breach to Nationwide’s systems that resulted in the exposure of 1.1 million individuals to identity fraud has underscored the type of cybercrime that businesses are now worried will cause them to face a growing number of civil court actions.

The insurer first went public with the announcement of the cyber attack on November 5.

However, the initial breach had occurred on October 3 and impacted by that company and Allied Insurance. This insurance news involved a tremendous amount of stolen data, including names, birth dates, driver’s license numbers, Social Security numbers, and other highly sensitive information.

This type of insurance news has become the primary potential litigation concern among publicly traded American companies.

Experiencing this form of insurance news could lead to massive financial losses through possible litigation, said a Chubb Group survey. Among the respondents, 63 percent had expressed that their primary worry was the loss of employee and customer data through a breach of computer security.

These concerns only intensify as insurance news reports further justify them. Last year, the typical breach of data caused an organization to face $5.5 million in additional costs, according to Ponemon Institute data. In other research from that same firm, it was determined that among 583 IT and IT security professionals in the United States, nine out of ten had said that their employers had faced a minimum of one breach of computer security.

Shortly after the discovery of their own cyber attack, Nationwide contacted authorities. On October 16, it gave confirmation that consumer data had been exposed. On November 2, the company found out the identities of the individuals whose data had been breached and they began contacting them to give them the insurance news.

The security measures being taken by the insurers in light of this insurance news has been reviewed by the California Department of Insurance in order to make certain that they were adequate, as there are over 5000 people from that state who are affected by the breach.

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