Cybersecurity for Auto Dealerships: The Need for Cyber Insurance in the Digital Age

Written By Charlotte Insurance on January 3, 2024. It has 0 comments.

a car dealership owner researching cyber liability / cybersecurity insurance options

Auto dealerships have a lot of classified information on their computers. They need their customers’ social security numbers, salaries, addresses, and more in order to qualify them for loans. Plus, there’s plenty of other private details recorded in those systems, such as pay records and employee information, as well as vehicle VIN numbers and more. All of these details make them a pretty big target for cyber thieves, who can hack into even the smallest systems and get away with information that can be sold on the black market.

So, how can you avoid becoming a target for hackers? And is there a way to help your customers after a hack has taken place that won’t break your bank account? Cybersecurity insurance is the answer.

What is Cybersecurity Insurance?

Cybersecurity insurance is a specialty option for businesses that want an extra layer of protection in case of a hack or other computer-based security breach. Since many cybercriminals are going after smaller businesses these days, like auto dealers, because they tend to have more lax computer security measures, this type of insurance has become increasingly popular. It’s designed to pay for a number of costs that can occur after your network’s security has been compromised, preventing you from having to pay for these things out of pocket.

What Does Cybersecurity Insurance Cover?

After your system has been hacked, there are a number of measures that you need to take, including:

  • Having Your System Upgraded – Your computer system and network will need to be secured in order to prevent future hacks. This can be quite costly, especially if you don’t have an in-house IT team that can oversee it. Thankfully, your cybersecurity insurance policy often covers it.
  • Notifying Your Customers – You’ll need to contact your customers very quickly so that they can lock down and monitor their credit accounts with TransUnion, Equifax, and Experian. In addition, you may want to offer them a year’s worth of credit monitoring with one of the credit bureaus as compensation for having their information exposed. Usually, your cybersecurity insurance will take care of these costs.
  • Dealing with the Fallout – It makes sense that your business could take a financial hit once word spreads about the situation. People will be less likely to buy a car from you, thinking that their information may get exposed as well. In order to combat these negative perspectives, you’ll have to put out a good PR campaign, which is yet another expense that your insurance might cover.
  • Lawsuits and Liability – Finally, having your systems breached and information stolen can open you up to lawsuits, even if you notify your customers quickly and offer them monitoring as compensation. Legal fees and a potential looming settlement can become expensive, taking away money that your business needs in order to continue to operate. This is where your cybersecurity insurance may be able to help if your policy covers such things.

Have Questions? Contact Charlotte Insurance

Want to learn more about cybersecurity insurance for your auto dealerships? Contact Charlotte Insurance. Our agents can explore and explain all available options and put together the insurance coverage plan your business needs.

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