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Cyber Liability for Self Storage: Big Risk for a Small Business

Written by: Jessica Lamoureux Posted: 6/6/2018
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Self storage facilities want to give the impression that they will keep their tenants' contents protected. A lot of money and effort goes into appearance, safety and security at facilities. However, what is less often addressed is protecting customer personal information. From credit card numbers, driver’s licenses and possibly social security numbers, self storage operators store a large volume of data; this data comes with big responsibility.

It is a common misconception that owners believe they are protected by their third-party software and credit card vendors. It is important to choose vendors that offer the most secure systems, however it ultimately comes down to the merchant’s responsibility to handle the repercussions of a cyber attack in the event it does happen.

A cyber attack can come from many avenues. A break-in at a facility where physical files are stolen or an employee stealing customer information are obvious exposures. Cyber criminals can gain access through servers or hardware devices such as laptops, desktop computers, tablets and USB devices. It is important to keep devices and software up-to-date with individual passwords. Hackers target software that is outdated and small businesses are the low hanging fruit due to unsophisticated IT protocols. This creates a very large exposure for self storage facility operators.

According to Chubb Insurance, “93% of small and midsize enterprises that have experienced a cyber incident reported a severe impact to their business. Almost all reported a loss of money and savings. Thirty-one percent reported damage to their reputation leading to a loss of clients, as well as difficulty attracting new employees and winning new business. And nearly half reported an interruption in service that damaged their ability to operate. In spite of those figures, less than 3% have cyber insurance.”

A Ccber Insurance policy is a cost effective way to protect your business from the exorbitant expenses that could occur with a cyber attack. Some insurance companies include a small sublimit for cyber or data breach coverage but it is usually not broad enough to cover the full range of expenses that could be associated with an attack. A good cyber insurance policy should cover expenses related to notification of current and past tenants, credit monitoring, legal fees, settlements, fines and penalties, forensic investigation, loss of business income as well as a public relations/reputation management services.

In summary, a cyber attacks is a real possibility for a self storage facility operator. If an incident occurs, it is important to have a partner that can step in with the experience and strategy for immediate response so you can continue to focus on your business with peace of mind.

About the Author

Jessica Lamoureux is the program manager for Storage Insurance Brokers, a national self storage property and casualty insurance program and division of World Insurance Associates, LLC. World Insurance serves more than 23,000 customers from 15 offices in NJ, PA, NY, CT, RI and FL and places more than $170 million per year in annual premium. Visit StorageInsuranceBrokers.com for more information.

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