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CA Department of Insurance

New cybersecurity risk management alert for consumers and businesses

News: 2016 Press Release

For Release: June 7, 2016
Media Calls Only: 916-492-3566
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New cybersecurity risk management alert for consumers and businesses
Cyber insurance may offer business protection against security breaches

SACRAMENTO, Calif. — According to a recent CNN Money story, every two seconds an American consumer is the victim of identity theft. The increasing sophistication of cyber criminals continues to put consumers and businesses at risk for identity theft and cybercrime. This growing threat has prompted the California Department of Insurance to release a new alert providing tips and essential information to help consumers and businesses better protect themselves against identity theft and cybercrime.

"As consumers increasingly rely on smart devices for online purchases and payment methods, opportunities for hackers and scammers to rip-off consumers have also increased," says Insurance Commissioner Dave Jones. "It has never been more important for consumers to take the steps necessary to protect themselves from identity theft, including protecting your insurance identity."

Experts urge consumers to protect their identity by safeguarding it at all times. Recovering from identity theft is a lengthy and complex process, which can cost the consumer thousands of dollars. Best practices for protecting your identity include being cautious about when and where you provide your social security number, date of birth, insurance policy numbers, and financial account numbers. It is also important to follow all password protection guidelines and keep a watchful eye on your credit reports, bank statements, and mail. Remember that legitimate businesses will never solicit personal, insurance, or financial information from you. If you receive an e-mail or telephone call requesting this information, it is likely a scam.

Individual consumers are not the only ones at risk—businesses are also at risk, as we've seen with high-profile data breaches of large and small companies. Cybersecurity insurance provides coverage for security or privacy breaches suffered by a business. Business cybersecurity policies tend to be highly customized and may offer what a business needs for protection from the financial effects of a breach.

The Centre for Strategic and International Studies estimated annual costs to the global economy from cybercrime was between $375 billion and $575 billion. The average cost of a data breach incident to large companies is over $3 million. An example of a costly breach is the 2011 PlayStation hacker breach that resulted in an almost $171 million loss to Sony that could have been vastly reduced if the company had thought to invest in cyber insurance coverage.

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Media Note:

For more information, see the National Association of Insurance Commissioners (NAIC)'s Cybersecurity Risk Management alert and NAIC's InsureU Campaign's 10 Insurance Smart Things to Consider to Stay Safe Online.

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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