“What it comes down to is educating the client to
identify exposures and what the processes are,” he
says. “Then we use real-life examples of breaches or
claims to show them they could be susceptible.”
In addition to helping business owners determine
their electronic, technological and social media
exposures, Hendrickson says it’s beneficial to
identify their paper exposures, such as access to files
and documents, and outline the business’ credit-
card payment processes.
“Once you start visiting with a client,
and determine what exposures can
happen, my feeling has been the
selling process is really not that
difficult,” he explains.
shares. “That’s pretty impressive. So, we’ve had
experience with a number of claims already, and
in my opinion, that says a lot about the product.
This is a product that is somewhat new, and we’re
already seeing claim activity, so that tells you the
exposures exist.”
Having liability insurance coverage in place,
Hendrickson says, makes the process significantly
easier for clients when a breaches occur.
“Can you imagine the difference between them
trying to handle this in-house when
you have multiple layers of federal
“...within 30 minutes agencies overseeing this information,
and the notification process?” he
of us being notified,
said. “Where do you start? Compared
we were already on
to one phone call to the agency who
third base, and all
makes one phone call to the legal
the other parties
counsel - and they basically take over
were still at bat.”
the entire situation, and go from
there. There’s no comparison.”
Hendrickson suggests discussing where
businesses keep their data – wether it’s
accessed through an on-site server or
uploaded online using what’s known
as cloud technology. Despite having
an off-site server, federal regulations still require
that businesses notify their clients if their cloud
is breached, even if the clients’ information was
untouched.
Hendrickson said his agency has already seen claims
filed, including one incident involving a client with
two HIPAA violations in the same week.
“By having a carrier that specializes in cyber liability
and privacy, we had attorneys specially trained
in this area, and within 30 minutes of us being
notified, we were already on third base, and all
the other parties were still at bat,” he says. “Our
client was the most protected, and we were already
in a position of strength of what we needed to do
compared to all the other parties involved.”
By taking immediate action, both incidents
were minimized. As a result, the client met all
notification requirements, and changed its internal
processes to prevent the breach from reoccurring.
For agents interested in learning more about
cyber-liability insurance, Hendrickson encourages
them to request a carrier’s policy information,
reading it beginning to end to understand the
mechanics. Additional resources, he said, can also
be found online.
“I think our industry needs to do a better job
of educating,” he emphasizes. “[Clients] don’t
realize there’s a need.
It really comes down
to an agent doing
the research, and
there’s a tremendous
number of sources
out there. If you
approach it the right
way with a client, by
the end, they’re ready
for a quote.”
“Here’s the beautiful thing: We had a renewal with
the carrier, and the premium was flat,” Hendrickson
20
KANSAS INSURANCE AGENT & BROKER | September - October 2017 |
Ross Hendrickson
President of MRH Insurance Group