Cyber Risk Insurance for Sports & Recreation Organizations
Cyber Risk insurance is the fastest growing policy in the commercial insurance marketplace due to the rapid increase in the use of automation and Internet technologies and the associated risks. Larger sports and recreation associations definitely have a need for this product due to their more complex operations and the widespread use of their servers, cloud severs, websites, and social media. However, even smaller, local-based organizations have exposures arising from their use of websites and social media, and many have adopted online transactions such as player registrations.
Sources of liability for sports and recreation organizations
- Email transmission of communications and related virus risks to recipients
- Collection of personally identifiable confidential information on websites and computers such as names, addresses, bank account, credit cards, etc.
- Collection of information on minors under age 13
- Collection of criminal background search records
- Blogs and social media and related liability from libelous postings and invasion of privacy
- Publication of website media and related risks of copyright infringement
What can go wrong?
- Release of confidential information due to hacker attack, accidental release, loss of laptop, or disgruntled employee resulting in civil lawsuits and expensive regulatory actions from state and federal agencies.
- Destruction of computer records by hacker or disgruntled employee.
- Denial of service attack shuts down service to members and related cyber extortion.
- Content results in lawsuit for libel, invasion of privacy, or intellectual property infringement
- Loss of income or extra expenses incurred while computer is shut down
Cyber Risk Insurance through stand-alone policy or endorsement onto existing policy
Standard General Liability policies do not cover these cyber exposures due to new policy exclusions that have been added to restrict coverage. The goal of the insurance industry is for these new exposures to be covered by a Cyber Risk policy. The best but most expensive way to add this coverage is through a stand alone Cyber Risk policy. Minimum premiums often start around $750 and increase with revenues. However, limited Cyber Risk coverages can be inexpensively added by endorsement to a General Liability or Directors & Officers Liability policy.
Coverage parts to a stand-alone Cyber Risk Policy
First Party Coverages (damages to insured)
- Crisis Management: pays public relations costs to rehabilitate reputation after a data breach.
- Cyber Extortion and Terrorism: pays extortion costs and loss of income due to denial of service attack.
- Loss Of Information: pays restoration costs of lost data, information, and programming from covered loss.
- Business Interruption and Extra Expense: pays for lost income and extra expenses to quickly return to operations after failure of computer systems due to covered loss.
Third Party Coverages (damages to third parties)
- Security and Privacy Liability: pays legal defense, settlements, and judgments when wrongful release or data breach results in damages to third parties.
- Privacy Breach Notification and Credit Monitoring: pays when wrongful release or data breach results in government mandated notification and credit monitoring expenses.
- Media Liability: pays for lawsuits alleging libel, invasion of privacy, or intellectual property infringements resulting from online content.
- Transmission Liability: pays for transmission of virus, Trojan, malware, etc. through email or website.
Cyber Risk carriers represented by Sadler Sports & Recreation Insurance
Stand alone policies:
- Chubb/Executive Risk
- and many more
Endorsement to existing policy:
- National Casualty
- Chubb/Executive Risk
How to get a Cyber Risk quote from Sadler Sports & Recreation Insurance
If you are a local sports organization and have purchased our Directors & Officers Liability policy through Nationwide Insurance, our form automatically includes an endorsement that adds some limited Cyber Risk coverages such as Electronic Media Liability, Cyber Privacy and Client Identity Theft, including net worth remediation ($5,000 or $25,000) of client personal information ($2,500 or $10,000 per person and $25,000 or $100,000 aggregate). Visit our homepage and find the program that best fits your operations and review our Directors & Officers policy form plan description for more detailed information on the limited cyber coverages that have been added.
If you are a larger local association or a state, regional, or national governing or sanctioning body, we recommend a stand-alone policy. Please complete the Contact Us form or call us at 800-622-7370 to request a quote.