Four cyber exposures community associations should watch out for.
Cyber threats are commonplace today, and community associations and their boards of directors must make data security a top priority. Failure to do so could result in board members being held liable to owners for negligence for any losses stemming from a breach.
Cyber liability exposures for community associations can come from:
- a computer malfunction accidentally distributing an association’s confidential information in a mass email or on printed material, or posts of sensitive data on a website
- an email communication discussing a member’s medical condition inadvertently being sent to all owners rather than to board members only
- a cybercriminal hacking the association’s computer system and gaining access to the association’s bank accounts
- an association employee’s or board member’s cell phone, laptop or USB flash drive being stolen, containing sensitive member and board executive session information
Cybercrime in the US, according to the Infosec Institute, costs $100 billion annually—that’s about two times the losses incurred from floods, hurricanes and other weather-related disasters. In addition, Small and Midsize Businesses (SMBs), such as community associations, are often the target of cybercriminals due to cybersecurity gaps and the valuable data they possess. Cyber thieves are looking to get their hands on information such as the owners’ bank account routing numbers, credit card numbers, and even social security numbers and email addresses.
To address the threat of exposer to cyber liability, a community association’s board should implement robust data-security measures to mitigate its risk as well as secure cyber liability insurance to step in, should a breach and loss occur. Also important is requiring third-party vendors, such as a management company, to implement strong cyber controls and carry cyber insurance, particularly if it is managing the association’s website.
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