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5 ½ Things to Know about Small Business Data Breaches

By January 26, 2018Personal Insurance

Data breaches aren’t just something that happens to mega retailers like Target. They also happen to thousands of small businesses every year.

If you own a small business, there are a few important things you need to know about small business data breaches. (This is in addition to ways to prevent data breaches.) Here’s what they are:

1.They’re common. A recent study shows that 55 percent of small businesses have had a data breach. What’s more, 53 percent have experienced more than one data breach.

2. They’re costly. If many records are compromised, you could easily be looking at thousands of dollars of damage. Some of the more serious small business data breaches have led businesses to close shop.

3. They can happen in many different ways. The most common causes of small business data breaches are employee or contractor mistakes; lost or stolen laptops, smart phones and storage media; and procedural mistakes.

4. They can take a while to detect. The complexity of today’s technology combined with the sophistication of many hackers can make a data breach fly under the radar for weeks or even months. It took eBay approximately three months to realize that a data breach occurred—and they’re a huge corporation with all kinds of monitoring. As you can imagine, it’s even harder for small business that lack the resources many big businesses have.

5. They may legally require you to take action. Forty-six states require that businesses contact any individuals whose private, nonpublic information is exposed through a data breach. Despite this, only 33 percent of small businesses that have a data breach notify affected individuals.

Having the right data security procedures in place can help prevent small business data breaches. But a data breach can happen even if you’re doing everything right. That’s why you’ll want to consider getting data breach insurance coverage for your business. It will help you overcome an incident in which your customers’ or employees’ nonpublic, personal information is compromised.

Some business policies automatically include data breach coverage while others require you to add it separately. Talk with a knowledgeable professional like your Insurance Agent to learn more about this increasingly important business coverage.

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