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What is Corporate Identity Theft Insurance?

Identity Theft

Corporate identity theft insurance is a type of insurance that protects businesses in the event personal data files are compromised. This data can be used to open new lines of credit under an employee's or customer's name. Learn the basics of corporate identity theft insurance and whether or not your corporation needs it.

What Does Corporate ID Theft Insurance Cover?

Identity theft coverage for corporations is designed to cover a myriad of costs that may arise from stolen customer or employee data. While each specific policy will vary, the following items are typically covered::

  • Legal liability of damages
  • Defense costs
  • Mailing costs and other costs associated with customer notification
  • Crisis expenses: hiring a public relations firm, legal counsel, etc.
  • Post event services: i.e. credit monitoring services for customers

Policies come with a wide range of coverage limits, with typical policies ranging from $100,000 to $5 million.

Who Benefits From Corporate Identity Theft Insurance?

Any corporation that holds personally identifiable information should consider corporate identity theft insurance. While modern technologies and procedures can limit potential for theft, it is not unheard of for thieves to gain access to lengthy lists of customer data. This can occur through sophisticated methods such as computer hacking, or by such simple means as dumpster diving. In the event of stolen customer data, corporations may be held liable for damages to each customer whose information was compromised. In extreme cases, it is not unheard of to spend millions of dollars cleaning up corporate identity theft. With a sufficient policy, most of these expenses may be covered.

Corporate Identity Theft Insurance Statistics

Weathering the storm following a major corporate identity theft event can sometimes be difficult. It is estimated that the average business loses approximately $15,000 for each identity stolen. Multiply that number over dozens or hundreds of customers, and it's easy to see how expensive identity theft can be. In total, it is estimated that companies worldwide lose $221 billion each year due to identity theft. In some cases, the costs associated with such crimes result in bankruptcy or the shuttering of doors for a business. For this reason, corporate identity theft insurance is often well worth the investment.

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