Is Your Business Ready in the Event of a Data Breach?
September 21, 2018
In this day and age, it’s no secret businesses rely heavily on electronic data and technology to conduct their daily operations. Vast amounts of personal and financial information are being shared and stored online as consumers increasingly shop, bank, and complete transactions over the Internet. In the event of a data breach, this can leave individuals exposed, presenting an enormous liability for businesses.
According to the recent 2018 Cost of a Data Breach Study: Global Overview by IBM Security and Ponemon Institute, the average size of a data breach has increased by 2.2 percent over previous years, and the average cost for businesses when a breach occurs is up 6.4 percent. As data breaches become increasingly common, and as high-profile cases continue to make headlines, it’s important to not only assess your business’ risk, but to also be prepared. This includes reviewing what is known as cyber insurance.
Generally, cyber insurance covers a business’ liability for a data breach involving sensitive information and is often excluded from a general liability policy. Cyber insurance policies are not one-size-fits-all. Rather, these policies are often especially complex. As a business owner, it’s critical to understand how the plan you choose is triggered and what it covers.
In addition to cyber insurance, business owners should consider developing a response plan that includes timely notice for those affected. Depending on where the breach occurs, there may also be laws in place that dictate how and when notice must occur.
Unfortunately, cyber breaches are not going away anytime soon. As businesses create new ways to protect personal data, cyber criminals come up with new ways to obtain that information. It’s important to identify your risk and take the necessary steps to protect your business from the high costs of a data breach.