Consider how your business would be impacted by the following:
- A shut down of your computer system due to an outside hacker, introduction of malicious code, a virus, or a threat to shut down your system?
- The cost of a breach of your customer’s personal information – notification costs, credit monitoring, consumer redress funding, not to mention the costs to rebuild your reputation and restore customer confidence following a breach?
- Financial and legal costs arising from an alleged misuse of copyrighted material or publishing liability on your website?
These are the risks nearly all businesses face today and are realities of the digital economy. In fact, in the past five years, 345,008,397 records containing “sensitive personal information” have been breached. Personal information can be easily sold through chat rooms on the Internet.
Why does it matter?
- More than 45 states and US Territories have enacted legislation requiring companies to notify customers if their personal information may have been compromised.
- Estimates of discovery and notification costs range from $50 – $204 per record, according to a 2009 study. A computer security breach can easily cost a company millions of dollars – and that’s not including shareholder lawsuits.
- According to a 2009 Verizon Data Breach Investigations Report, 50% of companies with fewer than 1,000 employees have suffered a data breach, and 52% of those breaches came from employees and third-party vendors – a statistic that affects companies of all shapes and sizes.
What every business needs to know about data breaches:
- The culprit is often someone close to your business. A surprising large proportion of data breaches are carried out by insiders – over half by some estimates – or by business partners. A trusted employee could be the culprit.
- The perpetrator could live halfway around the globe. To vandalize your building, a criminal must be on site. But a hacker can operate from anywhere in the world. Organized cyber crime rings operate worldwide 24/7.
- Size doesn’t matter. Half of all companies that suffer data breaches have fewer than 1,000 employees.
- Any company can be hit. Cyber criminals don’t care where they steal private information from: retailers, health care institutions, manufacturers, professional service providers, media and entertainment companies, and financial institutions are all likely to be targeted.
- A breach can result from a simple mistake. An employee might misplace a laptop, Blackberry or computer tapes or leave these in an unsecured location, such as an unlocked car.
- Cyber risk is steadily increasing. Data breaches affect hundreds of millions of records a year and reports of breaches continue to rise at a dramatic rate.
Cyber theft is a growing and potentially costly exposure. A comprehensive cyber security insurance policy covers many exposures associated with computer security breaches. To learn more about cyber security insurance policies, contact Elliott, Powell, Baden & Baker at 503-227-1771.