Don't Risk IT

Proper Disposal is a Key Aspect of Data Breach Insurance

Monday, March 24, 2014/Categories: business-liability-insurance

Most owners of small technology businesses have a general idea of the data security measures they need to protect their customers’ information during day-to-day business operations: establishing and updating passwords, using firewalls, maintaining Data Breach Insurance, and encrypting sensitive data are all essential to preventing cyber-crimes.

But what happens when it comes time to get rid of your old equipment?

If you’re like many small tech businesses, you’d rather spend your time serving your clients than ensuring that your old computers are properly handled by the recycling center. Failing to follow through on data disposal, however, can lead directly to a costly data breach.

High Price for Data from Trashed Computers

Technorati reports that criminal organizations will fork over hundreds of dollars for trashed hard drives, then pull the information stored on them (including bank account information, credit card numbers, Social Security Numbers, and more). This data can be used to steal identities, commit fraud, and potentially blackmail victims.

If you aren’t properly disposing of your company equipment, your customers’ information could be exposed to theft, which means you could be liable for any damages involved. Data Breach Insurance (also called Cyber Liability Insurance) protects you in the event of related lawsuits.

How to Properly Dispose of Computer Equipment

So what can an owner of a tech firm do to protect client data even after a machine’s usefulness has faded? Start with these strategies…

  • Wipe valuable information.If you plan to leave the hard drive intact for future use, be sure to clear any important information that could compromise your business or its clients. You can do this by degaussing (i.e., passing hard drives through a strong magnet) or overwriting existing data with new data (which can be done via specialized software).
  • Destroy your hard drives. If you don’t intend for the hard drive to be reused, you can destroy it to prevent data from being recovered. Hard drive shredders are the most high-tech way to do this, but pounding with a rock or drilling a hole through the center will also accomplish the goal.
  • Double check your recycler.If you’d rather outsource the task of clearing data and / or destroying your equipment, make sure the firm you choose has earned certification from the EPA. Certification ensures that recyclers both meet environmental standards and adequately destroy sensitive information.
  • Have the work done onsite. If you really want to make sure safety standards are met for destroying your company’s equipment, hire a firm that will bring portable shredders into your office so you can watch the whole destruction process.



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