2009-07-01

By Editor, CIR

The Lloyd's insurer says Beazley Breach Response has been developed to respond to the needs of healthcare, higher education, and retail and hospitality organisations. These include hospitals, doctors' groups, health insurers and higher educational institutions with revenues exceeding USD50 million, and retail and hospitality companies with revenues of USD50 million to USD3 billion.

The policy is written on a non-admitted basis for the account of Beazley's syndicates at Lloyd's. Coverage features include breach notification and credit monitoring services for up to two million affected individuals, provided in addition to a separate coverage limit for third party claims.

Breach response coverage includes:

-notification costs;
-a 3-bureau credit monitoring program from TransUnion Interactive offered to each person notified;
-attorneys' fees and computer expert expenses of up to USD250,000; and
-loss prevention services.

Beazley says the new product is response to an increasingly risky environment for entities such as healthcare organisations, educational institutions and retailers that routinely hold and process large volumes of personal data. It cites a study released in February by the Ponemon Institute showing that the average cost of data breaches increased by 40% between 2006 and 2008.

"We believe these services represent a significant advance on any comparable offering in the insurance market," adds Mike Donovan, head of Beazley's technology, media and business services team.

"Instead of including notification and credit monitoring costs -- typically offered with high deductibles -- within policy limits, we are offering them with modest deductibles in a separate insuring agreement where their value cannot be eroded by third party claims."

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