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Data Breach insurance


grandmabee

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On 8/25/2020 at 8:37 PM, Lion EA said:

My E&O policy is part of a group policy via NAEA. The underwriters vary by state, but it's all via NAEA. I added the Cyber rider a few years ago. It does add a couple hundred dollars to my premium, but I sleep better at night.

DO you know what the coverage limit is?

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The IRS seminar and then the same speaker at my local NY/CT-ATP said $250,000 MINIMUM. By the time you hire a lawyer and a PR person and a preparer or two to cover for you while you deal with the security breach for weeks/months and credit monitoring for everyone in your database (H/W and two kids is FOUR; partnership with 5 partners is SIX, for instance) and maybe even new computers when Homeland Security seizes yours, you'll spend a bundle!

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On 8/29/2020 at 4:20 PM, Lion EA said:

The IRS seminar and then the same speaker at my local NY/CT-ATP said $250,000 MINIMUM. By the time you hire a lawyer and a PR person and a preparer or two to cover for you while you deal with the security breach for weeks/months and credit monitoring for everyone in your database (H/W and two kids is FOUR; partnership with 5 partners is SIX, for instance) and maybe even new computers when Homeland Security seizes yours, you'll spend a bundle!

Exactly what does the insurance cover?  Can you really undo the loss of info?  I would think lawsuits?  Doesn't the insurance company hire the lawyer?  Does the insurance just pay for new computers?  Hiring others to prepare your tax returns? Monitoring everyone's credit?  Does the insurance cover all that?  Is there a deductible?

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I still have 15 big returns on extension, so I'm not pulling my policy out right now. From memory, the insurance reimburses me for expenses incident to a security breach. I don't remember a deductible, but I'm sure there is. The only person I know that's filed a claim is the owner of the first CT CPA firm that was hacked that spoke at NYCTATP and did a webinar for the IRS. His insurance company reimbursed him to his policy maximum, and he was very, very happy about that. He'd changed insurance companies and hadn't remembered that he had cyber coverage and was thrilled that he did.

You can look up the details for the NAEA group plan online or any insurance company's plan that interests you. See if one of your professional groups has a comparison of policies. Do you want to be able to hire your own lawyer or use the insurance company's lawyer, for example?

Nope. You can't undo it. All you can do is cover your out-of-pocket costs of dealing with it so you can spend time calming your clients, hopefully keeping most of your clients, and working through all the paperwork with your clients. The CPA above told us he'd have been out of business without the insurance reimbursement.

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