“Is your business a target for cyber criminals?”
Does your company store customer data; names, addresses, social security numbers, personal contact information? What about employee records? If you do and data is compromised, your company may be liable for all associated costs. Under Federal and State law companies that incur a data loss may be required to ascertain the extent of the data and then contact all entities whose information was compromised. This could include credit monitoring for a year at costs ranging up to $200 per record. So a small business with 1000 records could be looking at a $200,000 expense. Many small business owners don’t believe they are targets, however, with less sophisticated firewalls and encryption they are prime targets for cyber criminals. The other misconception: If you use a cloud storage provider this relieves the company of any responsibility or liability. In fact, this depends on the contract language which most often indemnifies the provider in the event of a breach. In addition to stolen data, there is the risk of a computer virus disabling hardware or corrupting data. An employee opening an email attachment or browsing the internet can result in data loss or computer failure Finally, while hackers account for a small percentage of loss, a greater risk are the company’s employees. Data theft or disabling systems by accident or on purpose all pose an increasing risk for the small business owner.
Here are key questions to ask:
- Can the business survive a shut down due to a data breach or data loss?
- Can the business afford to hire a computer forensic specialist and the resulting cost to contact all customers?
- Can the company afford to hire an attorney to deal with any potential litigation?
- Are you prepared for the public relations fall-out from a data loss?
In addition to installing firewalls, anti-virus software and data encryption, the company needs to consider “cyber-liability” insurance. This can cover the cost associated with: a.) loss of data, b.) loss of business income, 3.) denial of service, 4.) virus/hacker/sabotage, 5.) theft of system resources and 6.) extortion. The premiums are reasonable compared to the costs incurred as a result of a data loss.
Ask your insurance professional to review your current policy and provide a quote for “cyber-liability” coverage.
For additional information contact: Gary DePuydt, owner at The DePuydt Agency.
COMMERCIAL LINES & EVENT INSURANCE SPECIALIST