14
Wisconsin Community Banker
January/February 2014
place. Still others want to grow organi-
cally while avoiding any combinations
with other banks.
What do your shareholders want
the bank to look like in three, five,
and ten years? The board is account-
able to the shareholders. Therefore,
it is imperative that you understand
what your shareholders want the bank
to look like in the future, and it is
advisable to consider their views in
your strategic planning discussions.
Perhaps your shareholders would like
stock in a larger institution made up of
several combined community banks.
Maybe they would like liquidity for
their shares. Or, maybe they are happy
with what they have—proud owner-
ship in their community bank and a
reliable dividend stream. If you have
a large percentage of non-local share-
holders, have you considered their
vision for the future of your bank? In
our experience, the interest of non-
local shareholders can sometimes dif-
fer from those of local shareholders.
We hope that the sampling of stra-
tegic planning questions above is help-
ful as your board continues to plan for
the long-term success of your com-
munity bank. For a more extensive list
of questions to consider at your next
board meeting or strategic planning
session, you may contact either of the
authors. Pete Wilder may be reached
at 414-287-9609 or pwilder@gklaw.
com. Josh Torres may be reached
at 414-287-9579 or jtorres@gklaw.
com.
Insurance Policies Address Cyber Security Risks
Denise Davis,
Community
Bankers Financial
Services
In
today’s data-driven world
where sensitive information
is stored and transferred electroni-
cally, organizations of all sizes are
vulnerable to costly and damaging
liabilities as recently seen by Target
Corporation.
Community banks are not immune
to cyber risk. Even if you have the
state-of-art security controls, your
customers, shareholders, and corpo-
rate assets are at risk. Community
banks should not rely solely on the
Financial Institution Bond, Computer
Crime or other traditional policies
carried by banks to fully protect them
against cyber-crimes. The standard
Financial Institution Bond covers loss
of money, securities, and property, as a
result of first-party crimes (employee
dishonesty). It does not cover liability
losses from hacking, spamming, theft
of confidential customer information,
or cyber-attack—nor does it cover loss
of intangible property (intellectual
property) or business interruption
losses.
There are substantial financial costs
involved in finding and remedying a
security breach. Some of those costs
include notifying customers, which
is now legally mandated by 46 states,
as well as possible fines and legal
expenses. A community bank can also
suffer immense damage to its reputa-
tion and interruption of business.
Cyber policies for financial institu-
tions are designed to address the fol-
lowing e-commerce exposures under a
single policy.
Third-Party Liability Insuring
Agreements
A Network and Information Secu-
rity Liability agreement provides
coverage for the unauthorized access
to data containing identity informa-
tion, the failure to provide notification
of data breach where required by law,
transmission of computer virus, and
liability associated with the failure to
provide authorized users with access
to the company’s website.
A Communications and Media
Liability agreement provides cover-
age for claims arising from copyright
infringement, plagiarism, defamation,
libel, and slander in electronic con-
tent, such as websites and e-mail.
A Regulatory Defense Expenses
agreement provides coverage for gov-
ernmental claims made as a result of
network and information security.
First-Party Insuring Agreements
A Crisis Management and Event
Expenses agreement provides cover-
age for public relations services to
mitigate negative publicity as a result
of cyber liability.
A Security Breach Remediation
and Notification Expenses agreement
provides coverage for costs incurred to
determine whose identity information
was accessed, notification to those
individuals of the security breach,
and credit monitoring for 365 days, as
well as call center services to handle
inquiries and identity fraud expense
reimbursement for those individuals
affected by the security breach.
A Business Interruption and Addi-
tional Expenses agreement provides
coverage for loss of income, and extra
expense incurred to restore opera-
tions following a computer system
disruption caused by a virus or other
unauthorized computer attack.
Community Bankers Financial
Services, LLC (CBFS), a wholly
owned subsidiary of the Indepen-
dent Community Bankers of Min-
nesota and Community Bankers
of Wisconsin, provides insurance
and related products to community
banks. To receive more information
on stand-alone cyber policies, con-
tact: Denise Davis at 608.345.6998
or
. Or contact
Kevin Christians at 612.720.3199 or
.
