Claim story - HOA data breach results in ousted board of directors.
A Los Angeles-based HOA website, developed and updated by its management company, contained confidential information and data about its association and owners. When the HOA’s website was hacked, embarrassing and confidential private information was leaked—thus destroying the association’s attorney-client privilege in a legal case. The owners were shocked to learn that its board did not have a data security plan in place, nor had the board deemed the expense to implement one justified the cost. This discovery prompted the swift removal and replacement of each director—and the termination of the management company.
Not only did the leak jeopardize the HOA’s pending legal case, but there were also forensic fees to determine how the breach occurred, expenses for notification and mitigation services to those affected by the breach, penalties for failure to comply with state data-protection statutes, and other costs—not to mention the reputational damage that the association suffered when news of the breach was made public.
This is just one example of the type of real-world data security threats associations face. And it is a stark reminder to implement preventative measures against cyberattacks and to maintain proper data security and data liability coverage.
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