Cost one: Incident investigation
Remediating your security and being compliant with the electronic discovery process can create the bulk of these costs, but you’ll also be liable for a forensic investigation. It’s important to note, detection costs are the largest component of data breach costs overall. They make up $91 of the $250 per record.1
Cost two: Crisis management and customer notification
You’ll need to notify your customers of the breach and also monitor their credit and ID. Additionally, to protect your brand, it’s strongly recommended you increase your public relations and client care efforts, including staffing your customer service centre, responding to e-mail inquiries, and analyzing how your future marketing strategies will manage this negative incident.
Cost three: Regulatory fines and penalties
Punitive damages vary based on the circumstances of your breach, but either way, you will possibly be held liable in some way. Remember, if your business has been breached in the past, these fines and penalties could escalate significantly.
Cost four: Legal defence2
Has defending a lawsuit ever been seen as affordable? While a good lawyer is important to have in these situations, it’s critical to remember this won’t just be a flat fee whether you’ve had 100 or 100,000 records compromised. The cost of the defense will rise as the number of breached records does, since it will require more resources to defend the extra records.
Protecting your business starts here
As technology changes every day, your data management practices alone may not be enough to keep your business out of harm’s way from a cyber attack. Check with your jewellery insurance provider to find out how an insurance policy does more than offer protection against these risks.
1 See the 2015 Cost of Data Breach Study: Canada, Ponemon Institute Research Report.
2 Legal defence not available with Jewelers Mutual’s data breach and cyber- related coverage in Canada.
David J. Sexton, CPCU, is vice-president of loss prevention consulting at Jewelers Mutual Insurance Co., in the United States. A graduate of the University of Wisconsin, Sexton serves on the Underwriters’ Laboratories’ (UL) Security Systems Council, where he is a corporate member of the insurance category. He also sits on the board of directors for Jewellers Vigilance Canada (JVC), and worked on the Central Station Alarm Association’s (CSAA’s) Insurance Liaison Committee that assisted in the development of the UL burglar alarm modular certificate program and revised UL standard. Comments and questions can be sent to lossprevention@jminsure.com.
For resources regarding safety and security when carrying or working with jewellery, visit JewelersMutual.com. Jewelers Mutual Insurance Co., is the only company specializing exclusively in jewellery insurance in the United States and Canada. It is licensed in all 50 states and Canada.
