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85% of Small Businesses Set Themselves Up for Data Breaches

85% of small-business owners miss these 8 simple steps for protecting against data breaches and cyber threats.

Monday, March 24, 2014/Categories: cloud-insurance

Polls of small-business owners out earlier this year reveal surprising attitudes toward data breaches and cyber liability: the majority of entrepreneurs (85 percent) report that they believe a data breach is “unlikely” to happen to them.

Given that a PC World survey conducted in 2011 found that 90 percent of businesses had been hacked in the last year (and 60 percent had been hacked at least twice), it’s time for a change in perspective about the reality of data breaches and the potential they have to hurt a small business.

First of all, take a moment to remember the last time you heard about a data breach on the news. If you’re like many consumers, your first reaction was probably to make a mental note to steer clear of that company—at least for a while.

That attitude may not have much of an impact on the bottom line of behemoths like TJ Maxx or Marshall’s suffer the breach, but for small-business owners, a loss of confidence in only a handful of customers can be disastrous.

How to Guard Against Cyber Breach-Related Losses

So what’s a small-business owner to do to protect him- or herself from cyber criminals? Start with these best practices:

·         Secure, encrypt, and password protect sensitive customer and employee data.

·         Dispose of sensitive documents completely and securely.

·         Limit access to sensitive data.

·         Ensure that all software and systems are updated as needed.

·         Put up firewalls to block hackers.

·         Establish secure remote access protocol.

·         Establish and adhere to a privacy policy.

Surprisingly, polls of small-business owners found that fewer than half adhered to these guidelines, which can dramatically reduce a company’s risk of exposure from cyber threats.  

In addition to basic security protocol, small-business owners can protect themselves financially against cyber crime by investing in cyber liability insurance, which guards against the financial losses associated with hacking and similar crimes. Even better? You can obtain a certificate of liability insurance within hours to demonstrate to clients that you're serious about protecting them.

Restoring Customer Confidence after a Data Breach

When data breaches do occur, small-business owners can minimize the damage to their reputation (and bottom line) by taking immediate steps. First, of course, it’s important to contain and halt the exposure. While a business owner’s instinct may be to duck and cover at this point, communication is key: telling customers what happened, why it happened, and what steps have been taken to ensure it doesn’t happen again will go a long way toward reestablishing credibility and trustworthiness.

It’s also a good idea to set up a system for answering questions; often, when clients feel as if their concerns are being heard, they feel better even if the underlying problem hasn’t been resolved.

Have you had a particularly traumatic (or encouraging) experience with a data breach? Tell us about it in the comments.

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