Ask ISM’s Risk Manager
Vol. 5 No. 10
Q: Our broker keeps mentioning Cyber Insurance. We’re not a technology-focused school, although we do offer some advanced computer-based courses. So, I’m struggling to understand how we would benefit from this extra protection. For the cost associated with this coverage, I need some solid reasoning to bring to my School Head as to why we should consider purchasing it. Is this coverage worth carrying for schools not immersed in computer science?
A: You don’t have to be a technology-focused institution to need cyber coverage. In fact, all schools, regardless of educational concentration, should consider carrying cyber coverage to help protect against basic security threats.
Here’s a hypothetical claim example that might help illustrate one basic risk all schools and organizations face regardless of their mission:
A school administrator’s laptop is stolen. The laptop contained the social security numbers and names of many students. By law, the state requires the school to notify all families of this lost data. The notification process costs $7,000. The school also sets up credit monitoring services for all affected families. This costs $5,000. Finally, a state regulator fines the school $5,000 for not properly securing this data. All of these costs are covered by Cyber Insurance, and so reimbursed to the school (subject to the $1,000 retention).
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