Privacy & Network Security: The Hidden Costs of a Data Breach
Many businesses disregard the threat of a cyber attack. They have a secure system and most assume the hackers are more interested in mega corporations and sending political messages than accessing the few hundred or thousand records small to midsize business have. But nothing could be farther from the truth.
Data breaches are opportunity crimes. If the crack or opening is there, a breach can occur. Over half of U.S. small businesses experience at least one data breach. The top causes of breaches are employee or contractor mistakes, lost or stolen laptops, smartphones and storage media and procedural mistakes. One need only look at the lost iPhone debacle at Apple to see the high probability that mistakes and breaches can occur.
Eighty-five percent share customer and employee records with third parties, such as web hosting, information and technology services, employee benefits, billing, and payroll. Opening up your data to outside contractors, while necessary, immediately weakens their cyber security.
But part of the issue isn’t the breach itself, it’s recovering from it. Data breaches can be costly and take months, even years to recover from. What’s more, companies can make mistakes in the recovery process they may not even be aware of. With the over half of U.S. small businesses that experience data breaches, only one-third notified individuals that their personal information had been compromised, even though 46 states require individuals be contacted when their private information is exposed.
Protection needs to be two-fold. Companies should have a strong cyber security policy in place, including educating employees on the cyber risks and rules governing smartphone use for work-related activities. And they should have a recovery plan if a breach does occur, beginning with cyber-liability coverage.
There can be countless exposures and potential costs involved with a data breach, as well as regulatory action that business owners may not be aware of. Depending on the industry, various regulatory fines and penalties may apply. Forensic services may be necessary to determine the extent of a breach. PLRisk Advisors’ Privacy & Network Security coverage is the solution to helping your customers manage and protect against risk. We provide coverage for a wide range of businesses, including hard-to-place risks and offer tailored policies depending on the client and individual they serve.
PLRisk Advisors’ Privacy & Network Security coverage is a crucial insurance program that your clients should have. Contact us today for more information (855) 403-5982