In a recent article, “Data Defense,” published in Common Ground magazine, Pat Bruen, Product Manager for Distinguished’s Community Association Program, provides valuable insight on the various cyber threats HOAs, condo associations, co-ops and PUDs face. These community associations in their day-to-day operations handle and store confidential, personal identifiable information, such as homeowner names, addresses, bank account information, credit card numbers, and Social Security numbers – all vulnerable to data breach exposures and other types of cyber attacks.
Pat discusses the various types of cyber threats that could potentially cost a community association in forensic expenses, notification costs, legal fees, fines, crisis management, and third-party litigation. From computer hacking to phishing schemes and social engineering, cybercriminals are becoming increasingly more sophisticated in the ways they get their hands on financially valuable data. Pat points out that the average data breach cost for small- or medium-size businesses in 2018, according to a report by the Ponemon Institute, was $1.43 million.
Review Insurance Program for Cyber Liability
It’s important for an association’s board to review its insurance program to ensure coverage is in place for cyber-related losses. This includes reviewing the association’s Crime & Fidelity policy, which covers computer fraud, funds transfer fraud, and fraudulently induced transfers. Pat also stresses making sure a community association has Cyber Liability insurance to provide coverage for first- and third-party losses.
Equally important is for an association to have measures in place to help mitigate the potential for data breaches and other cyber threats. In the article, Pat offers several steps community associations can take to improve data security.