Data Breaches for Small Businesses can be Extremely Costly!
In 2016, a majority of companies are very worried about a potential hacking or data breach with regards to their sensitive customer information. While most data breaches you hear about in the news are for bigger companies, according to research conducted by Trustwave, 90% of data breaches impact small businesses. More importantly, when a breach occurs it kicks off a series of unavoidable and costly actions and expenses. Let’s take a look at some of the potential expenses that could be avoided with a properly designed Cyber Liability insurance policy!
Forensic Examination
A business that suspects a breach will undergo a forensic examination to determine if the breach has actually occurred and, if so, to what extent. The firm will need to hire an outside examiner to conduct the investigation, which may last from days to weeks. This examination may require shutting down the company’s network, depending on the type of business. These small business examinations may run in the range of $20,000 to $50,000.
Customer Notification
The majority of states require that customers, and in many cases the state attorney general, be notified if financial information is suspected of being compromised in a data breach. Depending on the number of customers and their locations, the process of sending notifications may cost thousands of dollars.
Credit Monitoring for Affected Customers
A company may be required to provide up to a year’s worth of credit monitoring and/or counseling services to customers affected by a breach.
Penalty and Fines
Depending on the industry, there may be penalties and fines for non-compliance when a breach occurred. Fines for small merchants can range from $5,000 to $50,000 or more.
Crisis Management
In the wake of a breach, damage to the trusting relationship between businesses and customers may result. Hiring a PR or crisis firm to undertake a campaign to regain that trust will be needed.
Liability Claims
A client or third party can bring both direct claims and cross-claims for indemnification against the business or organization for damages incurred as a result of the breach exposure. This involves legal defense costs and any indemnification if found liable on the part of the business.
At BB Insurance Marketing, we provide Cyber Liability insurance solutions for any industry with access to insurance providers with specific products to combat data breaches or hacking. Online business happens at the speed of light – don’t wait until it’s too late. Contact us to learn more about our Florida insurance solutions and cyber liability coverage or fill out our quick quote form and get a free quote today!