In the past year, a new digital security baseline has been established, complicating compliance and making it more critical than ever. But how does it affect your business? The answer is: very likely. As regulations evolve, every boardroom and strategic planning session should include discussions about risk, responsibility, and cyber liability insurance.
What Is the California Consumer Privacy Act?
Passed in June 2018 by Governor Jerry Brown, the California Consumer Privacy Act (CCPA) follows the European Union’s GDPR. Both laws aim to hold businesses accountable for protecting consumer data and give individuals more control over their personal information.
CCPA Highlights and Cyber Liability Insurance
Here are key provisions of the CCPA that may impact your business:
- Expanded consumer rights: Businesses must now handle consumer information differently, including collection, usage, disclosure, and sale.
- Right to deletion: Consumers can request that their personal information be deleted from your databases, including vendor systems.
- Reasonable security requirements: Businesses must implement and maintain security procedures appropriate to the information handled.
- Consumer lawsuits: Individuals can sue for damages over stolen information, without needing to prove harm.
Who Must Comply with the CCPA?
Although the CCPA is a California law, its impact is national due to the global marketplace. Any business with customers in California and meeting one of the following thresholds must comply:
- Annual gross revenue exceeding $25 million.
- Receiving or sharing personal information of more than 50,000 California residents annually.
- Deriving at least 50% of annual revenue from selling personal information of California residents.
The Role of Cyber Liability Insurance
Laws like the CCPA and GDPR emphasize the financial risks of non-compliance, but they exist for good reason. Consider these statistics:
- The average cost of a data breach was $3.86 million in 2018 (Ponemon Cost of a Data Breach Study).
- With the CCPA, consumers can seek $100 to $750 in damages per incident, potentially leading to multi-million-dollar payouts.
Cyber liability insurance is essential for addressing modern risks like data breaches, system failures, and cyber extortion. These risks are not covered by standard liability policies. If your business faces any uncertainty regarding phishing, security patches, or vendor standards, it’s time to explore cyber liability coverage.
We Can Help with Your Commercial Insurance & Cyber Liability Needs
At Swarts, Manning & Associates, we offer a unique perspective on your commercial insurance options and help identify the best coverage for your business. Contact us today for a complimentary consultation at (833) 878-2820.
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