Cyber HOA insurance may be something you hadn’t considered, but with the rise of cyber attacks it’s important for your HOA to talk with your insurance provider to evaluate your risk and coverage needs. If your first response to this is to think “hackers only go after big businesses,” you’re not alone. The reality, however, is that sometimes the smaller organizations are bigger targets because hackers assume they aren’t as well protected.
The first thing your HOA needs to do is make sure you’re not an easy target by:
- Creating strong passwords, and password protecting EVERYTHING. Make sure passwords are given to only key personnel and change them regularly. If your association has several passwords, set up a password vault to store all passwords in a safe location. This also makes keeping track of impossible to remember passwords possible!
- Establishing multi-step authentication processes. This slows down/prevents hackers who may only have one piece of information required to access your online accounts and servers.
- Encrypting everything. This includes backups and all critical data, especially records containing sensitive resident information and financial records.
- Filtering your email for spam. Often hackers gain entry by sending emails that look authentic at first glance, but are not. If emails are asking you to follow suspicious links, if the email/subject line is riddled with spelling or grammatical errors, or if you don’t know the sender, don’t open it or click any links.
- Inspect software and current cyber defenses on a weekly basis. If one of your defenses fails, hackers can gain entry without your board suspecting anything. Regular inspections mean you have the chance to catch the weak spot(s) before hackers have a chance to do real damage.
Unfortunately, no matter how well protected your HOA is, even the best defenses can be breached by skilled and determined hackers. That is why it’s necessary to carry cyber insurance.
A good cyber HOA insurance policy should cover:
- Cost of hiring a cyber forensics team to identify how the breach happened.
- Cost of repairing the breach/establishing better defenses.
- Regulatory fines.
- Legal fees from possible lawsuits.
- Cyber extortion.
- Notifying and compensating all affected parties.
- Crisis management and public relations to repair reputation.
No one, businesses or individuals, ever wants to be the victim of a cyber-attack. But, the possibility of one is a reality your HOA needs to consider and prepare for. Not only can a cyber attack damage your community’s reputation, but it can cripple you financially. Cyber insurance is as necessary as preventative measures, so make sure you take the time to talk with your insurance carrier!