Does your company use
computers for storing data, including private information? Does it generate revenue online? Do your employees use email? A “YES” answer to any of those questions is
the reason to cover your risk of a cyber- attack that results in a data breach.
A data breach is an event
that compromises personally identifiable information. It can be caused by hackers, malfunctioning
technology, human error, a faulty transaction or simply lost or improperly
disposed data. The effects on your small
business could be devastating, as you will be responsible for many activities
including credit monitoring for those people affected. Also, you will have to invest in an analysis
into how the breach occurred and steps involved, preventing future occurrences.
Just recently, companies of
all sizes have been talking about cyber-attacks and the need for data breach
coverage. Something as simple as sending
an infected email that results in the loss of a third party’s private information
can result in a liability. And, contrary
to public belief, you don’t need to be Target or Home Depot or Jimmy Johns to
be concerned about a risk to your business.
Most data breaches occur to small and mid-size businesses and frequently
never hit the news. Visa estimates that
85% of data breaches occur at the small business level.
Data Breach covers the
insured entity for third party claims relating to privacy injury and identity
theft. When a breach occurs, the
coverage typically includes costs necessary to notify people of the breach,
costs to indemnify the injured party and, in certain cases, the costs for
forensic work to determine how the breach occurred and to assist in preventing
future incidents.
A recent study by the
Ponemon institute, which studies data breaches, estimated an average
post-breach cost of $188 per record. [1] Those expenses can add up quickly and can
ruin many small businesses if coverage has not been implemented prior to the
breach. A simple example can provide the
proverbial wake-up call.
A restaurant owner
experiences a hacker attack whereby credit card numbers are stolen. Assuming 1600 customer records were affected,
the estimated cost would be $102,400.[2] That cost is before the costs associated with
lost business and reduced productivity due to the breach. Data breach coverage becomes a very small
price to pay when compared to the costs of dealing with a breach event without
existing coverage.
Here are some more facts to
help you understand the importance of protecting your business:
40% of data breach cases
result from people making mistakes.
36% result from system
glitches, such as software updates that expose sensitive private files.
24% of data breach cases are
from malicious and criminal attacks.
Don’t be a victim of our
evolving technological environment. Talk
to your broker about cyber liability or data breach coverage to protect your
business from the dreaded risk of a data breach.
About
Hipskind Seyfarth Risk Solutions
Hipskind
Seyfarth Risk Solutions offers a wide-range of insurance products for
individuals and businesses of all sizes. HS Risk Solutions, located in Chicago,
provides expertise in the area of health and ancillary benefits and property
and casualty insurance for businesses and individuals. For more information,
visit HS Risk Solutions website at www.hsrisksolutions.com or on Facebook atwww.facebook.com/HSRiskSolutions.
