This issue of The Fiduciary Shield outlines the protections that cyber liability insurance can provide to multiemployer plans and their service providers in the event of a breach of legally protected personal information such as participants' Social Security numbers or medical records.
Data breaches are becoming more common — and costly — for all types of organizations, and even with the best safeguards in place, it is impossible to fully eliminate the risk that protected data may fall into the wrong hands. Cyber liability insurance is designed to help protect against these exposures.
The risk of data breach was thrown into sharp relief in February 2015 after Anthem, Inc., the country's second-largest health insurer, revealed that hackers had broken into a database containing personal information for some 80 million people. The breach affected many multiemployer plans that offered health coverage through Anthem.
In addition to detailing the protections provided by cyber liability insurance, this issue of The Fiduciary Shield describes the different circumstances in which a multiemployer plan, and potentially its trustees, may be liable for a data breach. It also discusses the steps trustees can take to minimize their plan's cyber liability.
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