Increasing Vulnerability. Associations are increasingly vulnerable to liability for cybersecurity breaches involving electronic data. Their files may be compromised or lost from viruses, hackers and cyber thieves. It can also be lost through old-fashioned theft of computers, laptops, flash drives and smart phones. See 2018 Survey of Cybersecurity in Community Associations conducted by the Foundation for Community Association Research.
Protection Against Loss. "Cyber Crime Insurance" covers security breaches and losses whether from internal or external threats related an association's internet and networks. Coverage may include:
- financial losses
- costs related to notifying members of a breach
- lawsuits resulting from a data security breach
- errors and omissions by an association
- business interruption
- data restoration
- privacy liability
Insurance Review. Cyber insurance varies widely from company to company and boards need to inquire about coverage to make sure it's appropriate to their needs before purchasing a particular policy. If your Board does not have a tech-savvy member who is also versed in insurance policy review, consider having your association attorney review any policy to ensure you’re getting the coverage you think you are, before you purchase it.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.