By Katherine Beaty
The parking industry is increasingly digital, from license plate recognition systems to mobile payment apps. Although these innovations improve efficiency and enhance the customer experience, they also introduce vulnerabilities. Cybersecurity incidents, like data breaches exposing customer payment information or ransomware attacks crippling operations, have become genuine threats. For many parking operators, cybersecurity insurance feels like the safety net to catch them when something goes wrong. But how reliable is that safety net?
As a certified fraud examiner with years of experience investigating cases in which companies have relied on insurance to save them from financial disaster, I’ve seen firsthand how these expectations often fall short. Businesses frequently assume their policies will protect them fully, only to discover that exclusions, technicalities, or incomplete compliance leave them holding the bill. These lessons are particularly relevant to parking operators navigating the complexities of cybersecurity insurance.
The gap between expectations and reality
A closer look at cybersecurity insurance reveals a landscape filled with exclusions and fine print. Common policy exclusions, such as failure to implement recommended security updates or inadequate employee training, can leave parking operators without recourse. For example, if an operator’s mobile app is exploited due to a known vulnerability that wasn’t patched in time, insurers might reject a claim for resulting damages.
This gap between expectation and reality underscores the importance of parking operators carefully reviewing and understanding their policies. The stakes are too high for ambiguity: A single uncovered event could cost millions and jeopardize trust with customers.
A lesson in blending prevention and protection
The key to navigating this complex terrain lies in blending prevention with protection. Just as parking operators invest in gated systems and surveillance cameras to secure physical lots, they must adopt a dual approach to digital security. This means integrating robust cybersecurity measures while ensuring their insurance policies align with specific operational risks.
To this end, parking operators can take the following actionable steps:
- Assess risk holistically: Work with experts to identify vulnerabilities in both physical and digital systems and quantify potential losses.
- Align coverage with needs: Ensure your policy explicitly covers scenarios most relevant to parking, such as payment processing breaches or system downtimes.
- Stay compliant: Regularly review and update security measures, like software patches, to comply with policy requirements.
- Engage in regular audits: Demonstrating proactive measures can strengthen claims in the event of an incident.
A call for transparency and innovation
A recent industry report found that approximately 60% to 70% of cybersecurity claims are fully reimbursed, with the remainder facing delays, reductions, or outright denial. For parking operators, reasons for denied claims often include insufficient documentation of preventative measures, disputes regarding whether losses are covered under specific terms, or failure to meet compliance standards.
As the cybersecurity insurance market continues to evolve, transparency and innovation are vital. Insurers must work to simplify policy language, provide clear guidelines for coverage, and offer tools that help parking operators comply with terms. Meanwhile, operators should view insurance as part of a broader cybersecurity strategy, not a standalone solution.
Imagine a future where insurers use real-time monitoring powered by artificial intelligence to assess and adjust premiums dynamically, rewarding operators for implementing strong cybersecurity practices. Such an approach could transform the insurance landscape, fostering a partnership model rather than a transactional one.
For the parking industry, cybersecurity insurance is as essential as proper signage and functional payment systems. However, it’s not enough to rely on the promise of a safety net. Operators must actively ensure that their policies and practices work in tandem to protect their business. By understanding how these policies truly work and taking proactive measures, parking operators can bridge the gap between expectation and reality, ensuring they are prepared for whatever challenges lie ahead.
KATHERINE BEATY is executive vice president of customer experience for TEZ Technology. She can be reached at katherine@teztechnology.com.
