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Three Ways to Protect Your Business from a Data Breach
Posted 2/5/2019
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Did you know there were 560 million cyberattacks last year? That equates to 18 victims per second and a whopping 1.5 million victims per day.

Your customer's data can be stolen within minutes of a cyberattack once a hacker gains access to your network. We have all heard about recent large corporate breaches that happened at places like Target and Home Depot. However, 62% of all cyberattacks happen to small and mid-sized businesses.

Often, despite a company’s best IT precautions, a hacker gains access to information when employees unknowingly open phishing emails, use common passwords or mishandle client-sensitive information.

The biggest threat to a small business owner, just behind weather and natural disasters, is a cyberattack.

The costs associated with an attack are significant and increasing each year. In fact, 60% of companies go out of business because they are unable to recover from a single cyberattack. Educating your employees is a major step in protecting your business and your customers from a data breach. Your employees are the defense and having correct insurance coverage is important as well.

A standard Business Owners Policy (BOP) policy does not include coverage for a data breach or cyberattack. The best way to protect your business and clients is by adding the following endorsements onto your BOP policy.

#1 - Cyber liability coverage is a custom policy that includes first and third-party coverages. It is customized to your business needs based your operations and exposures.

#2 - First-party coverage applies to the loss of or damage to your own data that is caused during a data breach. The most common first-party coverages are notification costs, the expenses to notify your clients that you have experienced a breach.

#3 - Third-party coverage involves your liability to your clients or the government and regulatory entities. The most common third-party coverages are the damages paid to a third party because of a breach.

First-party loss examples include:

  • Computer forensic investigation
  • Crisis management
  • Breach notification
  • Credit monitoring
  • Identity theft remediation
  • Public relations
  • Data ransom and cyber extortion
  • Business interruption and income

Third-party loss examples include:

  • Legal fees to defend you in a lawsuit
  • Regulatory fines and penalties
  • Unauthorized access
  • Intellectual property loss

As we kick off a New Year, it is a great time to look at your cyber awareness and protect your business. There are many tools and services you can use to protect yourself against a data breach. They can be found through your existing insurance brokers or other business relationships.

Provided by Bryan Mosser, Vice President of Sales and Marketing for Cornerstone Insurance Producers.

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