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Technological innovations put users at risk for known and unknown threats. As hotels, motels and other habitational businesses implement digital practices to improve processes and guest satisfaction and to collect data, they are increasingly opening themselves up for a cyber-attack. In this article, we’ll explore the need for Habitational Cyber Liability Insurance and how this industry can minimize its exposures.
According to Hospitality Tech, both hotel owners and operators have a need for cyber liability insurance, and the parties should work together to avoid gaps in coverage. Most general liability policies do not cover cybercrimes or costs associated with a privacy event or breach. Some even specifically exclude losses incurred because of the internet or computer systems. A tailored cyber liability policy, on the other hand, typically provides first party protection and third-party protection for events arising out of cybercrimes or data breaches.
First party coverage protects the business of the policyholder in the event of a privacy breach. Bear in mind that the associated costs of a breach are not limited to recuperating the funds lost. Instead, the fees that cyber liability insurance covers extend to public relations costs, forensic investigation, credit monitoring, legal fees, and regulatory compliance costs.
Contrarily, third party coverage protects the policyholder against claims arising from affected stakeholders, regulators, payment businesses, and more. Both of these components are required to adequately secure a business.
As an agent, educating yourself on these provisions can put you in a better position for providing comprehensive coverage. The ramifications of a breach on one of your habitational clients can be devastating, enough to put them out of business indefinitely. Therefore, share the following with them when reviewing their cyber liability coverage.
Hoteliers should start with prevention by maintaining PCI-DSS compliance and implementing other preventative measures. Hoteliers should then allocate the burden of potential liability and the obligations to maintain compliance standards to the appropriate party through carefully drafted contract provisions.
About Mavon Insurance
At Mavon Insurance, we offer specialized coverages to meet the customized needs of niche markets such as hotels, student housing, condos, motels, senior living facilities, and multi-family units. As a leading national wholesaler, we can help you place coverage for a variety of habitational facilities. For more information, or to become an agent with us, we invite you to contact us today at (877) 426-2866.