Identity Theft in Parking Operations

June 15, 2025

What may seem like a routine service—parking a car—can expose both customers and businesses to significant risks. Parking garages, valet services, and automated systems often collect and store personal and financial data as part of their operations. While this streamlines convenience and service, it also creates an opportunity for identity theft. When customer information is mishandled or compromised, the liability for parking operators can be substantial, leading to legal consequences, financial losses, and reputational damage.

In this article, we explore how cybercriminals represent a significant risk for parking services, including garages and valet operations. To learn more about insurance solutions for the parking industry, visit our ArmorPark page.

The Nature of the Identity Theft Risk

Parking operations—especially those offering valet services or digital reservations—often collect sensitive information such as:

• Names and phone numbers
• Driver’s license or license plate numbers
• Credit card data
• Home addresses or work locations
• Vehicle information that may indicate ownership or financial status

This data is often stored digitally or transmitted wirelessly, which opens the door to cybercriminal activity. A single breach can compromise customer privacy, violate state or federal data protection laws, and damage a company’s reputation beyond repair.

How Identity Theft Can Occur in Parking Operations

There are several vulnerable points in a typical parking operation:

• Mobile Apps and Reservation Platforms: Weak encryption or insecure API integrations can lead to data leaks.
• Point-of-Sale (POS) Systems: Older systems without updated security patches are prime targets for hackers.
• Valet Logs and Manual Data Collection: Paper records or spreadsheets can be lost or stolen.
• Employee Misconduct: Staff with access to customer data may intentionally or accidentally misuse it.

When identity theft occurs because of poor data security practices, parking operation owners can face serious legal and financial consequences. State and federal data protection laws may require them to notify affected customers promptly, and failure to do so can result in fines or regulatory penalties. In addition, victims of the breach may file civil lawsuits or class action claims, especially if the stolen data leads to financial harm or privacy violations.

These legal actions can be costly to defend, even before considering potential settlements or judgments. Beyond the courtroom, the business may suffer reputational damage that leads to lost partnerships, reduced customer trust, and the termination of commercial contracts. For owners, the financial fallout can extend far beyond the immediate expenses of managing the breach, often affecting long-term business viability.

In the next section, we explore risk management solutions, including comprehensive insurance coverage, to protect against the legal, financial, and reputational risks associated with customer identity theft.

Insurance Solutions for Parking Operations

For owners of parking garages, valet services, and related businesses, insurance is a vital component of a comprehensive risk management strategy—especially in the face of growing identity theft threats. These operations handle sensitive customer data daily, and a single breach can result in costly legal battles, reputational damage, and business interruption. The right insurance coverage can help absorb these shocks and ensure business continuity.

Key insurance solutions include the following.

Cyber Liability Insurance: This is the most critical coverage when it comes to data breaches and identity theft. It typically includes:

• Legal defense costs and settlements arising from privacy lawsuits
• Notification and credit monitoring services for affected customers
• Public relations and crisis management expenses
• Regulatory fines and penalties, when legally permissible
• Business interruption losses due to a cyber incident

General Liability Insurance: While not specific to cyber threats, this coverage can protect against third-party claims of bodily injury or property damage, which may arise in conjunction with service failures or physical theft of customer information or items.

Professional Liability (Errors & Omissions) Insurance: If a data breach stems from employee error, negligent handling of information, or poor system maintenance, this coverage can help protect the business from claims of inadequate service or professional negligence.

Garage Keepers Legal Liability Insurance: Often included in broader commercial auto or garage policies, this coverage protects against damage or loss to customer vehicles while in the care of the business. While not directly tied to identity theft, it’s an essential piece of protection for operations with custody of vehicles.

Employment Practices Liability Insurance (EPLI): If identity theft results from employee misconduct, EPLI can provide defense and indemnity against claims related to hiring, supervision, and termination practices, particularly when the business is accused of negligent oversight.

Summary

Tailored industry policies may combine several of these protections into a single package designed specifically for parking and valet operations. Working with an experience insurance provider or underwriter familiar with the parking industry can ensure that coverage aligns with the specific risks your operation faces, including both cyber and physical liabilities. ◼