If you had to guess what percentage of small and medium-sized businesses experienced a data breach in 2013, what would you say? 10%? 20%? Well, the answer is in fact much higher than that.
The correct answer is 40%.
That is frightening. And what is even more frightening is that the vast majority of those businesses had no idea that their information had been breached for months! Even a company as small and local as OTTO’s Pizza discovered in August that they were the victims of an attack beginning in May, resulting in the exposure of credit card information of over 900 customers. Also this year, Shaw’s supermarkets suffered from stolen credit and debit card information, while private information stolen from Home Depot resulted in the largest data breach in state history. This truly can happen to anyone, and businesses like we have here in Maine are prime targets for these data breaches because they often have the least data security.
A basic definition of cyber liability
Let’s break it down in the simplest way: the phrase “cyber liability” is a blanket term used to address a wide range of data issues—most commonly the loss and theft of personal or sensitive information—as well as the accidental release or publication of these materials. If your business handles transactions or electronically stores the information of any private businesses, customers, employees, or patients, then you are at risk for a data breach. With small and medium-sized businesses, this potential is often overlooked, as many of the most widely reported data breaches targeted large corporations. Statistics, however, tell a different story.
Just the facts for smaller businesses
In 2013, 40 percent of data breaches occurred in organizations with 1,000 or fewer employees, and 31 percent occurred in those with 100 or fewer employees. Most often, these issues weren’t discovered for months or even years after the breach took place. This year, a data breach analysis sponsored by IBM found that not only is the frequency of data breaches on the rise, but the average cost per data breach to a company has risen 15 percent since last year to $3.5 million.
What is the cost of a data breach to you and your business?
The $3.5 million average cost is only the tip of the iceberg. Small and medium-sized businesses often have the least data security, making them prime targets for data breaches. If your company handles sensitive information, you should take the time to assess your security strategy and coverage. According to the IBM analysis, having cyber liability insurance aids in managing the risk of cyber attacks, but has also been shown to encourage good security practices within companies.
Cyber security is quickly becoming one of the most relevant issues facing businesses today. As one of our current customers, we want to make sure that you fully understand the potential risks so we can work together to give you the best coverage possible. Contact your United Insurance agent today and ask them about your cyber liability coverage.
At United Insurance, we are life-long learners. We are committed to educating ourselves and our clients about the latest industry standards, coverage options, and recent changes in the laws. We do this because we don’t just sell insurance; we protect what you value most so we work hard to make sure we provide the right solutions for your unique needs. Follow the latest news and learn more with us.