With the trend of cyber-hackers creating havoc across the world, the city of Hickory Hills has decided to take precautionary action by purchasing cyber insurance.
The council unanimously voted Thursday to buy insurance from the Beazley insurance vendor based out of Chicago at a cost of $6,501 annually with a 3.6 percent state tax rate on a $1 million liability coverage claim.
Cyber insurance includes coverage for theft of personally identifiable non-public information in computer data and hard copy form and liability rising from failure to comply with state breach-notice laws; and coverage for failure to comply with the insured’s privacy policies.
“With what happened at Advocate and most recently, Target, I believe it’s necessary for us to have cyber liability (insurance),” Alderman Mark Szesycki said at Thursday’s City Council Meeting.
Szesycki said he has received three quotes from cyber liability insurance vendors, including AIG, ACE and Beazley.
Beazley’s Information Security and Privacy Insurance provides coverage for fast changing industries confront fast changing risks, the alderman said.
Beazley will be providing Hickory Hills with a variety of industry-leading coverages for emerging data security and privacy exposures facing companies today.
Hickory Hills will receive third party coverage in response to unauthorized access, theft of or destruction of data, denial of service attacks and virus transmission involving the insured’s computer systems resulting from computer security breaches, along with electronic media liability coverage.
The electronic media coverage covers the display of electronic content on the insured’s website; and extends to many internet-related exposures including advertising injuries that are not covered under many of today’s general liability policies. Hickory will also be receiving an additional coverage endorsement for the destruction and loss of data as well as network business interruption and cyber extortion caused by failures of computer security to prevent a security breach.
City Treasurer, Dan Schramm, said there is no credit card information available in Hickory Hills’ online files; however, if someone does hack into a city computer or a city employee loses a city computer or city government file, Beazley will provide the proper coverage.
“We don’t really have the same type of risk as Target did with credit card information saved on file,” Schramm stated, “But, we do have enough of a risk.”
Schramm added that at first he was hesitant of the $6,501 annual fee from Beazley; however, with the one million dollar liability coverage offered to the city, he feels it is well worth it.
Szesycki agreed the city having cyber liability insurance at the offered cost is definitely worth it. “We don’t want anyone getting into our computer files,” he said.
The information that could be stolen in the case of a hacker situation within the city of Hickory Hills City Government would be all current and former employees’ personal information, personnel files, payroll files and social security numbers.
Schramm noted the importance of employees’ social security numbers saved within the city’s database, and the necessity to keep that information safely guarded and insured.
City Attorney Vince Cainkar voiced his opinion on the issue by reminding the city council about 3-4 years ago, the Alsip Park District had their employee account hacked into and the bank affiliated with the park district at the time did nothing about it.
“I couldn’t believe it,” Cainkar said. “I definitely think cyber liability insurance is a good idea.”