The vast majority of insurance agencies do not have any insurance coverage for reimbursement of the costs incurred due to a client data breach. Here are just a few of the reasons why a Network Security and Privacy (NSAP) policy makes sense for insurance agencies:

• Coverage for data and other non-physical perils is routinely excluded under Property policies.
• The “intentional acts” exclusion found in a standard E&O policy might eliminate coverage if the breach was caused intentionally by an employee.
• E&O coverage may not respond at all for acts that are outside the provision of professional services.
• Liability arising out of the destruction of electronic data is not typically covered under the standard General Liability or Property policies.
• Crime policies generally only cover theft of money, securities or other tangible property – not information theft or the destruction of electronic data.

Don’t be the cobbler with holes in his shoes! You need to take the appropriate risk management steps to protect the private client information contained within your electronic and physical files.

If that does not work, you will be glad you have separate coverage.