Small business data breaches reach all-time high
Big data breaches seem to be a regular thing in the news now.
With the widespread reports of these stories, however, comes the feeling that data breaches only happen to big corporations with millions of customers. Small businesses with comparatively few customers would hold little interest for hackers, right?
Not so, according to the 2016 Verizon Report. In fact, 59 percent of data breaches happen to small companies, and small business breaches have risen 44 percent in the last two years.
According to a report by the Department of Homeland Security’s National Cybersecurity Awareness Campaign, each instance of cyberattack can cost a small business thousands of dollars, which means it doesn’t take many breach incidents to land a small business with no insurance in bankruptcy.
This likely is why 60 percent of small businesses close within six months of a data breach.
How cyberattacks work
Most cyberattacks are not targeted, the National Cybersecurity Awareness Campaign explained.
“The majority of cybercriminals are indiscriminate; they target vulnerable computer systems regardless of whether the systems are part of a Fortune 500 company, a small business, or belong to a home user.”
Many small business security systems lack the sophistication to keep out even the simplest hacking attack. Often this is because such businesses lack the budget to fund a full-time technical staff or because they don’t have the experience to know what kinds of firewalls and other protections are necessary to keep their customers’ data safe.
Some hackers employ a type of virus known as ransomware, which takes control of a company’s website, critical data and customer records until a ransom — generally several thousand dollars — is paid. Others simply steal customer data and sell it on the dark web to the highest bidder, putting customers at risk of identity theft.
Preventing data breaches
In some ways, preventing online data breaches is a lot like preventing theft from a brick-and-mortar establishment. There are certain basic safety precautions every company should take to keep itself and its customers protected.
Here are some things Homeland Security suggested you do to secure your business:
- Identify your online weaknesses
- Back up your sensitive information in remote locations
- Invest in data loss protection insurance, known as cyber insurance
- Educate your employees on how to handle sensitive information
- Require users to create strong passwords and change them regularly
- Install and run cybersecurity software
One of the most important things you can do is keep your software up to date. Hackers are constantly upping their game, which means you need to, as well.
Benefits of cyber insurance
With so many data breaches occurring nationwide, it may only be a matter of time until your company becomes the victim of one. Having cyber insurance can help alleviate the stress and financial ramifications of such breaches.
A good cyber policy will offer features such as forensic investigation, credit monitoring, public relations assistance, privacy defense and loss prevention resources. Some insurance options also will offer reimbursement of $50,000 to $100,000 in business losses.
What to do after a data breach
The key to minimizing your losses will be quick recognition that the breach has happened. If you have a cyber insurance policy, tell your insurer right away and your carrier will guide you through reporting to law enforcement and legal requirements. If not, you may want help from a technical and even legal team.
The most important step is alerting your customers to the breach. If you have their personal data, you have responsibilities. You or your insurer will want to offer protective services to help redeem yourself in your customers’ eyes. Then take steps to prevent a repeat of the breach in the future. Educate your employees, too, so they know how best to protect your data in the future and keep your company safe.
About CopperPoint: Founded in 1925, CopperPoint Insurance Companies is dedicated to protecting and empowering conscientious business owners. Our vision is to be a top-tier regional commercial insurance company and the preferred partner for business owners, agents and brokers in every community we serve. For over 90 years CopperPoint has been a leading provider of workers’ compensation insurance. Today we are a multi-line commercial insurance company, offering products such as general liability, property and casualty, crime, inland marine, commercial auto, cyber and employer practices liability insurance to ensure peace of mind to conscientious business owners, their employees and customers.