You may have recently received correspondence from Sheridan Wangler at NTCA in regards to a new liability coverage option developed by the Telcom Insurance Group and available through the NTCA Insurance Program that may be of interest to you. The insurance referenced protects against allegations and demands by third parties due to disclosure of their confidential and private information. CPNI coverage and Red Flag Rules Protection will transfer the risk of fines, penalties and it will indemnify customers who suffer a loss due to a data breach up to the limit of insurance purchased. Telcom developed this coverage in response to the FCC /FTC Regulations which you are required to adhere to in business practice. The fines are potentially enough reason to consider this risk transfer but the bigger exposure we see is your customers data falling into unauthorized hands and the actual as well as alleged (pain and suffering) claims that can follow.

The focus of this coverage relates to your local, long distance, wireless telephone companies , Internet business, television operations as well and the Voice Over Internet Provider (VOIP). Your systems collect information and it is used in the billing and customer qualification process and the coverage described will help protect you in the event an incident may occur.

You might be asking if current policies, including but not limited to general liability, directors and officers and even most professional liability policies, provide protection for this risk. In short, the answer is no and the attached article provides a more in depth analysis of why this is the case. Telcom Insurance Group has a product in place that we will be more than happy to discuss with you or provide you with a quote for coverage which eliminates current coverage gaps. For more information please review the NTCA Sponsored Telcom Webinar on Network/Data Security: CPNI and Red Flag Exposures and Risk Transfer Options.

Please give us a call with any questions you may have.