Understanding and Preventing Data Breaches

December 14, 2016

If your company handles critical assets such as customers’ personal data, intellectual property or proprietary corporate data, you are at risk of a data breach. It doesn’t matter if you are a Fortune 500 company or a small “ma and pa” shop—cyber thieves are always looking for their next score. It is often assumed that smaller businesses can escape attention from cyber crooks, but according to according to industry experts, an increasing number of data breaches are occurring at companies with fewer than 100 employees. No company of any size is completely safe from a data breach.

Data Breach Basics

A data breach is an incident where private data is accessed and/or stolen by an unauthorized individual. Data can be stolen by a third party, such as a hacker, or by an internal actor (perhaps a disgruntled or recently fired employee).

Data Breach Prevention Techniques

To reduce the chance of a data breach, it is wise to develop an IT risk management plan at your organization. Risk management solutions should leverage industry standards and best practices to assess hazards from unauthorized access, use, disclosure, disruption, modification or destruction of your organization’s information systems. Consider the following when implementing risk management strategies at your organization:

Not all companies have the resources to create and implement a fully customized plan. However, there are many simple, cost-effective steps any business can take to help prevent a data breach.

What to Do if You Have a Data Breach

It is common to have an “it will never happen to us” philosophy when it comes to data breaches.

Unfortunately, that thinking can lead to lax security measures and carelessness when it comes to protecting sensitive information. If your company suffers a data breach:

  1. Act quickly. Report the breach immediately to local law enforcement. Notify important suppliers, vendors and partners.
  2. Alert your customers. If there is a data breach involving customers’ personal information, activate your plan to alert them. The information compromised could be incredibly harmful to your customers, so alert them as soon as possible.
  3. Investigate. If you do not have the resources to do an internal investigation, consult a third party. The quicker the breach can be dealt with, the fewer negative effects your company will endure.
  4. Take measures to lessen the chance of a future breach. Fortunately, a data breach can be a good learning tool for your company. Analyze why the breach happened and take steps to make sure it doesn’t happen again.

The Federal Trade Commission (FTC) has many resources available to assist you and your company in recovering from a data breach. Those resources can be found on the FTC’s website.

Insurance is Important

Chances are, your company doesn’t have a “rainy day fund” capable of paying for data breach remediation. Fortunately, there are insurance options available to make recovery easier.

Cyber liability insurance policies can cover the cost of notifying customers and replace lost income as a result of a data breach. In addition, policies can cover legal defense fees a business may be required to pay as a result of the breach.

It’s important to remember that it is cheaper to prevent a data breach by securing data than it is to lose that data from a breach. A data breach insurance policy can give you peace of mind and allow you to allocate resources to help keep data secure.

We’re Here to Help. 800-360-3000

A data breach can be very costly and even has the ability to shut a business down. Contact Chalmers Insurance Group today for resources to help support your cyber security efforts. We have the expertise to ensure you have the right coverage in place to protect your business from a data breach.

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