Did you know that 39 percent of small business owners don't think that a data breach would impact their business? The fact is, as use of the internet continues to increase, so does the level of sophistication used by cybercriminals to steal identities, access accounts, hack networks and infect computers with malicious software (malware).
Because many small business owners believe they're too small to be targeted, they fail to consider data breach insurance or take other steps necessary to protect their systems and the sensitive information they collect or store on customers, patients and employees. But cybercriminals know that smaller businesses don't often invest in systems and data security, making them ideal targets. A data breach can result in big consequences for small businesses, like:
• Damaged reputation
• Temporary closing
• The need to notify impacted parties, as may be required by law
• Possible defense and settlement costs
What Constitutes a Data Breach?
Loss, theft, and accidental release or publication of personally identifiable information (PII), including:
• Social Security numbers
• Bank account numbers
• Credit or debit card numbers
• Driver's license numbers
• Patient histories and medications
How Much Might a Data Breach Cost Your Business?
Trying to assess how much a data breach might cost your business can seem like a daunting undertaking. Considering that the average cost per breached record is $141, the total costs of a breach can add up quickly. There are cost calculators that can help you estimate the financial impact of a data breach to your business.
How Can You Protect Your Small Business?
Most business owners understand that the personally identifiable customer information they have on their computers is a target for hackers and that their online presence leaves them open to liability claims. However, far fewer take adequate measures to protect their business. Here are some scenarios where a business could benefit from cyber liability or data breach insurance:
- The business has a network that their employees all save data on, which is helpful but also puts the entire operation at risk should a computer virus work its way in.
- The business keeps customer or patient records such as medical histories, credit card, bank account or Social Security numbers in its database — which is a target for hackers.
Data breach insurance and cyber liability insurance help cover the costs of a data breach for things like identity protection solutions, public relations, legal fees, liability and more. It's important to have data breach coverage in place because quick action is critical for restoring your customers' and the public's confidence if your business is victimized by a cyberattack. To mitigate the risk of civil litigation and other penalties when a data loss or theft occurs, a cyber liability or data breach insurance policy can provide access to professional assistance to help businesses comply with applicable laws and regulations.
The Bottom Line
There's no magic bullet for preventing or mitigating a data breach. It's important to have the right safety measures in place to protect your data from a breach — and to protect your business.
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The information provided in these materials is intended to be general and advisory in nature. It shall not be considered legal advice. The Hartford does not warrant that the implementation of any view or recommendation contained herein will: (i) result in the elimination of any unsafe conditions at your business locations or with respect to your business operations; or (ii) will be an appropriate legal or business practice. The Hartford assumes no responsibility for the control or correction of hazards or legal compliance with respect to your business practices, and the views and recommendations contained herein shall not constitute our undertaking, on your behalf or for the benefit of others, to determine or warrant that your business premises, locations or operations are safe or healthful, or are in compliance with any law, rule or regulation. Readers seeking to resolve specific safety, legal or business issues or concerns related to the information provided in these materials should consult their safety consultant, attorney or business advisors.
The Hartford® is Hartford Fire Insurance Company and its affiliated property and casualty insurance companies, 690 Asylum Avenue, Hartford, CT 06155.
Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, Hartford Lloyd's Insurance Company, Property and Casualty Insurance Company of Hartford, Hartford Underwriters Insurance Company, Twin City Fire Insurance Company, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company. In CA by Sentinel Insurance Company, Ltd. (CA license # 8701) and its property and casualty insurance company affiliates, 690 Asylum Avenue, Hartford, CT 06155.
Automatic Data Processing Insurance Agency, Inc. (ADPIA) is an affiliate of ADP, LLC. All insurance products will be offered and sold only through ADPIA, its licensed agents or its licensed insurance partners; 1 ADP Blvd. Roseland, NJ 07068. CA license #0D04044. Licensed in 50 states. All services may not be available in all states. This information is not intended as tax or legal advice. If you have any questions, contact a tax or legal professional.
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