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How secure is your cyber space?

Fraternals are in the business of risk transfer. We transfer an individual’s risk of lost income as a result of death or disability through the purchase of a life or disability income insurance certificate, helping to secure the financial future of an entire family. We transfer an individual’s risk of not having a steady stream of retirement income through the purchase of an annuity certificate, lessening the burden on government programs and enhancing the quality of life for the family.

It’s a noble profession – and perhaps our most important “community service activity.” Individuals whose financial futures are sound and secure are much more likely to be generous in their support of their fraternal’s programs to serve others in both the fraternal community and the larger community in which members live and work.

Shoes of the cobbler

But are we as thorough in assessing – and transferring – our own risks? Every society has the “standard package” of insurance protection: directors and officers liability, workers compensation, property, and an errors and omissions program for its sales force, among others. But there is an emerging risk that may potentially be more significant than all other exposures combined. It’s called cyber liability.

You’ve probably read more than a few articles about government and business websites being hacked by a new generation of criminals whose goals range from disrupting everyday business practices, to identity theft, to outright terrorism. And you’ve probably thought to yourself, “That could never happen to me or my society.”


Well, think again. As life insurers, we have what the bad guys want – lots of personal data (including medical histories) on millions of individuals. Combine this with what is most likely a lower standard of cyber security than most commercial businesses and fraternals make a very tempting target for data thieves and mischief makers. And top it all off with an evolving regulatory environment that imposes increasingly severe penalties on organizations that fail to adequately protect their customers from such breaches and you’ve got an accident waiting to happen.

Breaches – and losses – have already happened to fraternals…

In fact, such accidents have already happened to several societies, as we heard on the Alliance’s recent Cyber Liability Webinar [LINK to Webinar]. The nature of our business model – networks of local chapters with portals to the home office data base; hundreds of sales agents operating with lap tops full of personal information on members – makes our network security…porous.

Check out this report (“5 Predictions for 2013”) from TrendLabs to get a better handle on what your business should be looking out for in the coming year. The TrendLabs assessment is compiled from input of 1,000+ threat researchers across the globe at Trend Micro. These are individuals whose job is to predict and defend against computer system attacks. While not every component of the report may relate to your society, the development of your organization could eventually bring these concerns closer to home.

There is a solution…

How can you identify the leaks in your society’s cyber security, learn how to mitigate potential losses, and transfer the risk of the remaining exposure to a qualified insurer? The Alliance has partnered with the Lockton Group, a global leader in cyber security risk management, to help members complete this process in a professional and cost effective way. The first step is to undergo a cyber security assessment with the pros at Lockton. They’ll uncover gaps you may not be aware of, suggest ways to protect your data, and script an insurance package specifically for your society.

This is not an off-the-shelf process or product – so don’t be fooled into thinking that you are covered because your local broker added a cyber liability rider to your general liability policy. Cyber liability is a moving target and you need a specialist to help you assess, manage, and transfer the risk. You can learn more about the Alliance’s latest membership benefit – and take a major step to enhancing the security of your members personal data – by contacting Lockton and scheduling a cyber risk review. Here’s how to do it…

One Response

  1. Degree of Honor had no idea how vulnerable we are AND we are currently not active in the social media venue. It is worth your time to get educated even if you don’t move forward with the coverage at this time. I learned so much from the Lockton Group discussion.

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