What is a Data Breach?
I'm sure you have heard about a Data Breach in the news at some point in time. Usually the media just tells about the large companies that have been impacted. For example, Experian and T-Mobile have made the news recently. Since we only hear about the large companies being attacked, I'm sure most small businesses think it cannot happen to them or the impact isn't that big. The reality is you don't have to be a Home Depot, T-Mobile or Target to be a victim of a Data Breach as most cyber attacks are small to medium sized businesses. According to an industry expert, 62% of all Cyber attacks are on small to medium sized businesses. Now to get back to the question, what is a Data Breach? It is private data that is viewed, used, held for ransom, or stolen by an unauthorized person. Who would have thought 10 years ago we would be worried about someone taking our data and holding it ransom.
Let's review some facts:
As you can imagine, it's a little more complex than a phone call to your IT guy or gal. The most important thing at stake for a small to medium sized business when it comes to a data breach is not only their business, but their reputation. These large corporations have huge public relations firms to come to their aide, and when it comes to defense from a lawyer, money is no object. Worst case scenario their stock might drop a few points. But again, the PR firm is going to make a statement and put everyone at ease. Another thing these large companies have is a trusted brand, which can go a long way when an attack occurs. A small to medium sized business probably does not have the luxury of any of these. One small breach could cause their livelihood to crumble and never recover. Fortunately, there are options. The first option is to do nothing and have the mentality that it won't happen to you. The second option is a solution.
When it comes to Business Insurance, business owners need to be thinking about more than just General Liability, Umbrella, and Property Insurance to protect their business. Since we live in this digital age now, Data Breach Coverage should be considered by all business owners. The amount of coverage is going to depend on your level risk and your business. Here's some basic coverage information you should look for when it comes to Data Breach:
These are just a few things to look for when considering a Cyber Liability policy. Here's a fantastic checklist to review. Bottom line, a stolen laptop, smart phone, a stolen record or a virus can have an enormous impact on a business. There are many options when looking at Data Breach coverage for your business. It can be very confusing and overwhelming, if I can help, please let me know.
Since October is National Cyber Security Awareness Month, it’s only fitting that we write about Data Breach. We have all seen the headlines. Store after store having data breaches and their customers are left wondering if their information was stolen. I know I wondered on a few occasions if I was a victim. Even private pictures are at risk of being stolen and exploited. When a data breach occurs, a quick response is crucial to minimizing the damage to a business’s reputation. Data breach insurance can be the difference between a quick, organized response and a response which further erodes the public’s opinion. As we all know, with all the social media networks and media outlets out there, protecting your company's brand and reputation is vital.
While most business owners understand the value of having their business covered by business insurance, they do not always realize that there is an additional option that will further protect them in the event of a data breach. Due to recent breaches, awareness is up. According to Marsh, LLC, an insurance brokerage firm, one out of three companies has insurance to cover data breach losses. A recent study showed that 43% of companies have had some form of data breach in the past year, which means some businesses were left without coverage. Depending on the information stolen, the typical cost to the company in the event of a data breach is $120 - $300 per record stolen. Even for a small business, those numbers add up and can quickly become overwhelming.
Data breach insurance is specifically designed to address the needs of a business that has been attacked in order to gain access to personal information, it is handled by a team of professionals who can monitor the situation and determine how best to correct the company’s public image and provide resolution. This is done through prompt notification of the affected customers, monitoring the company’s public image, addressing any negative fallout immediately, and ensuring that any legal or liability issues which occur from the data breach are dealt with quickly and professionally. Insurance can even extend to monitoring the affected customers credit to ensure that they do not have issues due to the breach in the future.
As with any risk, prevention plays an important role. Preventing a data breach should be a priority of all business owners and risk managers. Some insurance companies also offer some services before a breach has even occurred. These services include making sure employees are aware of basic guidelines which can decrease the occurrence of a data breach via a preparedness website. The best mindset to have is, it’s not a matter of if a data breach will occur, but when.
If you have any questions regarding Data Breach Insurance or other Business Insurance coverages, please contact us today. Below are some resources that you might find helpful, including an application.