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Online Data Protection

Data Breach Insurance has become increasingly necessary in the last two years, as millions of Americans have found themselves victimized by data breaches.

Thursday, January 09, 2014/Categories: cyber-liability

With online data theft becoming more and more common and research group Advisen predicting that 2013 will be a turning point in cyber security [PDF], IT professionals need to review their data security systems and find ways to prevent data breaches.

The last two years have marked a historic rise in cyber crime. During that time, attacks became more sophisticated and common, and small businesses were more exposed than ever to hacking and malware attacks. How bad was it? Let's look at some data breach statistics.

Javelin Strategy and Research, a research firm specializing in customer transactions and security, compiled historic numbers about the rise of data breaches. In 2012…

  • 15.8 million consumers had their credit card data stolen.
  • 4.5 million consumer Social Security numbers were stolen.
  • 2.7 million bank account usernames / passwords were hacked.
  • 1.8 million bank account numbers were compromised.

Simply put, millions and millions of consumers were victims of cyber crime last year.

Data Protection and Recovery for Small Businesses

Computer data protection is just as important for small businesses as it is for larger ones. In fact, according to USA Today, more than half of all small businesses have had a data breach, and more than a quarter have had multiple breaches.

Here are a few important ways to protect data and prevent data loss:

  • Establish data security training protocols. Not only can data security training prevent data breaches, but it can also lower your Cyber Risk Insurance rates.
  • Limit access and storage of sensitive data. According to a TrendMicro report, 56% of employees store sensitive data on their laptops or mobile devices. Doing so exposes your business up to more risk because those devices often operate outside your firewall. Even worse? They can easily be stolen.
  • Backup data. This should go without saying. Unfortunately, over 60% of small business owners don't regularly back up their data. Don't make the same mistake. (For more about data backup, read our article "Which Continuous Backup Method Protects You From Lawsuits?").
  • Know your insurance. Cyber Liability Insurance can pay for the costs of a data breach, including legal costs, fees and penalties, and credit monitoring costs for consumers affected by a breach. General Liability Insurance does not cover those costs.

For more about data security systems, read "How to protect Data: Data Breach Solutions."

What to Make of Growing Cyber Threats

At the beginning of the year, Forbes Magazine predicted that cyber security would be one of the top five issues small businesses face in 2013, and the glut of statistics showing a rise in cyber crime has proved this statement correct. 

With more cyber attacks on record than ever before, what action should small-business owners and IT professionals take? Bolstering your cyber defense by investing in security software and training your employees are excellent places to start. But they shouldn’t be the only data security measures you take.

Cyber threats are still out there and hackers are getting more sophisticated. This has led many businesses to purchase Cyber Liability Insurance (aka Data Breach Insurance). Cyber Liability policies protect IT consultants from data breach lawsuits, pay for customer notification costs, and help  meet legal obligations to protect customers after an attack.

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