We’ve all seen the headlines: Large organizations like Sony, Citigroup, Google, and AOL experience a “data breach” in which sensitive information is compromised.
But did you know that:
According to a 2011 Verizon Business report of more than 760 data breaches analyzed in 2010, almost 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 involving private business transactions, customers, patients, or employees—in other words, virtually any business—is at risk. Key industries that should consider insurance coverage for protection against data breaches include:
- Professional services (eg, attorneys and accountants) and healthcare practices, depending on the sensitive nature of the client and patient information being handled
- Retailers and restaurants, based on the significant number of debit and credit card transactions incurred
- Financial services and insurance agencies, depending on the confidential nature of the stored customer information
Regardless of the nature of your business, the potential damage 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 to your customers, employees, vendors, patients, and other stakeholders. The right coverage can ensure that in the event of a breach, you and all stakeholders are protected, and that you’ll receive expert help throughout the process.
Plus, in the event of a default, you won’t just need liability coverage. You’ll also want to be covered for expenses incurred to restore your business’s reputation, including:
- Legal expenses
- public relations
- good faith advertising
- Expenses of notification to affected people and companies
- Services for affected individuals and businesses, eg credit monitoring or setting up a helpline to provide them with information and advice.
important options
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 the vulnerability of your business and take corrective action to prevent breaches. before they happen.
Talk to your insurance agent
Your insurance agent understands your business and how to offer you the right protection for all the risks you face, including the growing threat of data breaches. Call him today to discuss your coverage options.
