Capital One Breach Shows Value of Cyber Insurance

The massive Capital One data breach – one of the largest hacks in history – is a stark reminder of the importance of cyber insurance coverage.

The breach affected approximately 106 million Capital One customers in the US and Canada. In its wake, the bank took the unusual step of publicly disclosing details of its cyber insurance policy, which has $400 million in coverage limits and a $10 million deductible.

For Capital One, that coverage could be a lifesaver. A class action lawsuit seeking unspecified damages was filed just days after the breach became public.

That lawsuit, Kevin Zosiak et al. v. Capital One Financial Corp. et. al. (U.S. District Court for the District of Columbia), accuses Capital One and its affiliates of negligence and breach of implied contract. The complaint alleges the defendants failed to maintain an adequate data security system, failed to safely monitor its system, and failed to protect sensitive information.

Read details of the Capital One breach and the resulting lawsuit here, here and here.

To find out if you were affected and what you should do about it, visit this special Capital One website dedicated to the breach.

Credit Card Application Info Exposed

As recently as the mid-2000s, cyber insurance was the exception for businesses rather than the rule. No longer. Industry experts predict the total value of premiums will top $7.5 billion in 2020. An estimated one in three US companies have some form of cyber coverage, according to this source.

In the Capital One breach, most of the compromised data was information submitted by consumers and small businesses in credit card applications from 2005 through early 2019.

The exposed data included names, addresses, zip codes, phone numbers, email addresses, dates of birth and self-reported income. In addition, hackers accessed credit card data, credit scores, limits, balances and payment histories. About 140,000 Social Security numbers and 80,000 linked bank account numbers were also compromised, according to Capital One.

Following the breach, the bank issued a press release stating the following:

• Capital One is notifying those affected through “a variety of channels.”
• The bank will offer free credit monitoring and identity protection to all who were affected.
• The bank says “it is unlikely that the information was used for fraud or disseminated.”
• Customers are advised to enroll in text and/or email alerts to monitor their credit card accounts for suspicious activity. They should call the number on the back of the credit card if unusual activity is detected.
• Customers should watch out for phishing emails and impersonation scams, especially if the message asks for personal information. Capital One never contacts customers by phone or email to get credit card or account information or Social Security numbers. Suspicious emails should be forwarded to abuse@capitalone.com and then deleted.

Do You Have Cyber Protection?

Cyber attacks are not limited to large corporations like Capital One. In fact, 30 percent of cybercrime victims are small businesses.

Solo and small law firms are prime targets. A cyber insurance policy can be your insurance firewall against computer hacks and client data theft.

In North Carolina, Lawyers Insurance – the endorsed agency of the NC Bar Association – provides an array of unique cyber insurance programs. Features include top-notch coverage at competitive prices, along with a simplified application process.

“We work with different companies to make sure your law firm — no matter the size — has the right coverage,” says Lawyers Insurance. “From solo-practitioners to small law firms to large firms, we offer products that meet your liability needs.”

For more information or a free quote, click here.