TechInsurance Warns of Hidden Costs to IT Firms with End of Windows XP Support

Recent federal rulings could increase the frequency and cost of XP-related data breaches for small IT businesses.

CHICAGO—April 15, 2014— TechInsurance, the leading online provider of insurance for small IT businesses, announced today that two recent rulings handed down in federal courts could increase the potential cost of Windows XP-related client data breaches for IT business owners.

The first case, decided in a Florida federal court in late February, permits monetary settlements for data breach victims whose information is exposed but who do not suffer direct financial losses. The second, decided this month in a New Jersey court, allows for FTC lawsuits against businesses that fail to meet “industry standards” of data protection.

Terminated Windows XP support should be a real wakeup call,” said Ted Devine, CEO of TechInsurance. Microsoft will no longer provide security updates for its Windows XP operating system, the millions of machines still running that OS will be much more vulnerable to hackers and security breaches going forward. “IT services clients have a reasonable expectation that their service providers will proactively alert them to this vulnerability and help them takes steps to perform the necessary upgrades,” Devine added.

Because of the two federal decisions mentioned above, XP data breach costs could increase in two ways:

  1. Breaches that don’t result in identity theft but do trigger client lawsuits could cost thousands in settlements, judgments, and lawyers’ bills.
  2. Breaches enabled by an outdated operating system (like XP) could trigger third-party regulatory lawsuits, an expensive addition to mandated data breach response activities.

IT businesses can be responsible for these costs because they can be sued by victimized clients. Technology professionals may be considered partially liable for advising clients on necessary security protocol, and if they are found negligent, they could be responsible for financial damages.

TechInsurance notes that IT businesses can reduce their risk of data breach expenses by educating clients who run XP about the importance of updating to a currently supported operating system, encouraging their clients to invest in Cyber Liability Insurance, and maintaining their own Errors and Omissions Insurance coverage.

About TechInsurance, an insureon Company

TechInsurance, the nation’s leading online agent for IT freelancers, contractors, and micro businesses, offers a variety of policies, including Errors & Omissions Insurance.

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