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Saturday, December 16, 2017
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The Risks of Cyber Liability in the Self Storage Industry

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The Risks of Cyber Liability in the Self Storage Industry

Certainly, the self storage industry has benefited from adding computers and the internet to their business operations over the last twenty years. The ability to store and transmit data about self storage tenants, the ease of managing financial transactions and the use of social media to engage greater marketing have certainly affected how facility operators conduct their business and have enhanced their bottom line profitability.

 

Risks and Costs

The litany of cyber risks is long and involves, among many other possibilities, viruses that could impact the use of the system, the physical taking of computers and servers, the financial theft of accounts through hacking or the unauthorized use of a tenant’s confidential information. This list does not even include the possibility of cyber extortion asserted by third parties. The risk of cyber attacks can occur from outsiders halfway around the world to local business partners and employees. Some hacking is done by former employees in an effort to damage their former employer. Some hacking occurs with financial motives only, the thieves selling the stolen credit card numbers and other personal information to others or using them to purchase goods. The size of the targeted business is irrelevant. Data breaches can occur with small or large businesses. Many small businesses are targets due to the greater likelihood that their data security is not as strong as might be in place with larger companies.

 

Self Storage Impacts

The use of computers, networks, servers, and mobile devices significantly increases the vulnerability to cyber security breaches, which can include both the “accidental “ release of information as well as the unauthorized disclosure of information, such as might occur from outside hacking. Either way, these cyber events can result in significant liability to self storage businesses which are not prepared for the consequences of such occurrences.

 

A self storage facility that suffers an accidental or intentional breach of its data may be faced not only with an impact to the use of management software system (which controls their tenant’s information and the facility’s ability to bill for the rent) but could have the cumulative effect of losing tenants who terminate their leases as a result of the breach. Any violation of data security can result in staggering costs to a self storage facility that is required to spend the money to reconstruct their data, manage tenant notification and deal with the potential fallout of lease termination. Since more and more facilities are reliant on technology to manage their operations, the impact from a data breach can simply be catastrophic for a self storage owner and its business.

 

Insurance

Due to these risks, it is important for self storage facilities to have proper firewalls in place to protect their network systems as well as to conduct periodic inspections of their systems to determine if they are vulnerable to attack. It is recommended that businesses regularly change their access passwords, and verify that proper anti-virus and spyware software systems are in place. But in addition to physical protections being used to safeguard a facility’s data, the business must consider insurance protection for the risk as well.

 

| Categories: Legal, Insurance, Operations | Tags: Cyber Security, Computers, Networks | View Count: (541) | Return
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