On August 20th a federal judge in California approved a settlement against Anthem that involved 78 million members information being exposed. 19.1 million of those claimants impacted proved that they were exposed and the settlement will be split amongst those members. As part of the settlement the members of the class action lawsuit can claim up to $10,000 for out of pocket costs that they incurred. This will be capped at a total of $15 million. Anthem is also required to provide credit monitoring for up to two years and for members who already have credit monitoring Anthem will provide a cash payment of $50. Anthem will be required to invest a significant amount more in their cyber security program as well.
Anthem obviously has much more personal information due to their business and the total number of customers they serve than most organizations but this settlement demonstrates why cyber insurance is so important for all companies to have. As part of cyber coverage, regulatory fines and penalties can be covered which surely would be involved in a case like this. In addition, notification and credit monitoring costs can be covered and they are often the most expensive aspect of a breach since companies are usually required to pay for credit monitoring for a certain period of time regardless if the client suffered any damage.
A company like Anthem shows just how large these settlements can be, but for most companies a much smaller breach could jeopardize the future of the company or at the very least severely impact it. With cyber insurance you can transfer much of this risk to an insurance company and shape the policy to cover your first party losses (business income, forensics, etc.) and the expenses that third parties incur because of your negligence. Because there are so many companies writing this coverage in the market place premiums are relatively low compared to the risk. What that means in the future when losses start to pile up I do not know, but for now because most carriers are trying to gain market share and emerge as the leader in the space it is a buyer’s market.
You can learn more about the case specifics here.