County to purchase cyber liability insurance
By Chad Ingram
Published Aug. 17, 2017
Haliburton County will purchase cyber liability insurance, providing coverage for its municipalities in cases of hackers and system breaches.
Councillors on the county’s finance and correspondence committee made the recommendation during an Aug. 9 committee meeting.
Cyber insurance is a relatively new insurance product. Cyber crime against governments typically involves hacking, and, internationally, there have been incidents of public sector breaches where sensitive information has been held ransom.
What is referred to as the “Trojan scam” is a con where hackers, having gained access to a municipality’s system, will pose as the reeve or chief administrative officer via email, asking employees to transfer money. Those employees can then unwittingly become part of a fraud operation.
With cyber liability insurance, municipalities can be reimbursed for any such fraudulent transfers.
There are different types of cyber liability protection, including from extortion, corporate identity theft, telephone hacking, system damage and so on.
“The county’s call for insurance request for proposals asked for quotes for new cyber insurance coverage as part of the proposal,” read a report from county treasurer Elaine Taylor. “None of the proponents submitted a quote for cyber insurance. It was at that time that cyber insurance would be quoted separately once needs had been determined. The county has since requested a quote for cyber insurance from its provider that provides coverage for the county as well as the four member municipalities as additional insureds on the same policy, as well as a quote for cyber insurance coverage for the county alone.”
At the committee meeting, Taylor told councillors that it makes sense to acquire combined coverage for a number of reasons.
One is that the municipalities’ IT systems are interconnected and managed largely by the county.
“The County of Haliburton information technology services staff provide the majority of the IT support and act as system administrators for the four member municipalities,” Taylor’s report read. “In addition, IT also has access to the majority of their data. The County of Haliburton data centre hosts email for all our of our municipalities, and hosts (or is soon to host) the file server and finance server for three out of the four municipalities. The county is also responsible for IT disaster recovery planning.”
Combined coverage would also eliminate a scenario of finger-pointing between different insurance companies should a breach occur, Taylor said, and also provide cost savings.
“For an organization our size, potentially, $2 million should be sufficient,” Taylor told councillors.
The annual price tag for $2 million in cyber insurance will be about $16,500, with a deductible of $10,000.
Councillors agreed that the cost would be split between the four lower-tier municipalities based on the percentage of the overall tax levy that they constitute – Dysart et al just less than 40 per cent, Minden Hills at just more than 25 per cent, and Algonquin Highlands and Highlands East at about 20 and 15 per cent, respectively.