We’ve all seen the headlines: Major organizations like Sony, Citigroup, Google, and AOL experience a “data breach” in which sensitive information is compromised.
But did you know:
According to a 2011 Verizon Business report of more than 760 data breaches analyzed in 2010, nearly two-thirds involved companies with fewer than 100 employees.
It is important to remember that most data breaches are not sophisticated hacking schemes targeting multinational companies. They are simple scams that target small businesses through theft:
- Credit card information
- Paper files that are not shredded
- Business Laptops
Any business that handles data related to private business transactions, customers, patients or employees, in other words, virtually any business, is at risk. Key industries that should consider insurance coverage for data breach protection include:
- Professional services (for example, attorneys and accountants) and health care practices, based on the confidential nature of the client and patient information handled.
- Retailers and restaurants, based on the significant number of transactions made with credit and debit cards
- Financial services and insurance agencies, depending on the sensitive nature of stored customer information.
Regardless of the nature of your business, the potential harm from lawsuits and liability damages is real, and the long-term damage to your company’s reputation could be devastating.
Data Breach Insurance Coverage – Why You Should Consider It
As a small business owner, you have a deep sense of responsibility towards your customers, employees, vendors, patients, and other stakeholders. Proper coverage can ensure that in the event of a breach, you and all of your stakeholders are protected, and that you will receive expert help throughout the process.
Plus, in the event of a default, you don’t just need liability coverage. You’ll also want to be covered for expenses incurred to restore your company’s reputation, which include:
- Legal expenses
- Public relations
- Good faith advertising
- Notification expenses to the affected persons and companies
- Services for affected individuals and businesses, for example credit monitoring or establishment of a helpline to provide information and advice.
You may want to purchase data breach coverage as a stand-alone policy or as part of a comprehensive business insurance policy. The best agents will offer both.
Also, make sure the policy and services you purchase are proactive in helping you prevent data breaches. You should have access to information and advice to help you analyze your business vulnerability and take corrective action to prevent breaches. prior to occur.
Talk to your insurance agent
Your insurance agent understands your business and how to offer you adequate protection for all the risks you face, including the growing threat of data breaches. Call him today to discuss your coverage options.