Data Breaches: What Small Business Owners Should Know
A data breach is not something that just happens to mega retailers – small businesses are also at risk. From customers’ credit card numbers to employee tax information, it’s likely that your small business handles sensitive data on a regular basis.
All it takes is one convincing phishing email or a stolen laptop for that sensitive data to get into the wrong hands. Here are five surprising things to know about small business data breaches – and how you can protect yourself.
As A SMALL BUSINESS OWNER, HERE’S WHAT YOU SHOULD KNOW ABOUT DATA BREACHES
They affect any business, large or small: In 2020, almost a third of the data breaches involved small businesses. Larger businesses might have the money and resources to help them recover, but smaller companies face greater challenges in the recovery process.
They’re costly. If several records are compromised, you could easily be looking at hundreds of thousands of dollars in expenses. These expenses can include legal fees; costs to upgrade or replace your POS system (depending on the source of the breach) or even a forensic examination. Some of the more serious small business data breaches have led businesses to close. For those that do stay open, it can be costly to repair the damage to their reputation and restore customers’ trust.
They have multiple causes. Small businesses can experience a data breach in a number of different ways. In 2020, 70% of breaches were caused by external sources. Phishing scams top the list. Phishing is a tactic scammers use to contact others by email, phone or text– acting as a legitimate institution – to lure them into providing sensitive data. Another popular method for hackers is to install spyware to get into your system to steal private information.
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 can be hard for a small business, lacking the resources that many big businesses have, to uncover a breach.
If it happens to you, take action and alert those involved. It’s important to let your customers and employees know what’s going on immediately. Be transparent and be prepared to address any questions from affected individuals. Several states even require that businesses contact any individuals whose private, nonpublic information is exposed through a data breach. For trusted advice, read this guide to data breach response for business owners from the Federal Trade Commission.
Having the right data security procedures in place can help reduce the risk of small business data breaches – but a data breach can still happen. But here’s the good news: Cyber liability insurance as a rider to your regular business policy can help protect you with specialized coverage to get things back to normal.
At Martin Insurance Agency, we’re here to protect everything you have worked so hard to build. Talk with us to learn more about our business data breach insurance coverage.
