Cybercrime on the Rise

Cyber Risk insurance

Small businesses increasingly vulnerable to data breaches

It’s no secret that cybercrime is on the increase. Unfortunately, the news headlines about big business and government hackings are only the tip of the iceberg. Small to mid-size businesses represent the highest risk for cyber attacks.

More than half of all reported data breach victims are small to mid-size businesses. The Small Business Administration defines these companies as having fewer than 500 employees on the payroll. That’s most businesses in the U.S.

Smaller businesses are typically less prepared for a breach because they often lack the finances needed to put adequate protections in place. The average cost of a breach for a small company with insurance exceeds half a million dollars. Just the cost of customer notification can do serious financial damage to a small company.

Worse, insurance rates are driven up by the rise in cybercrime claims. Network security and privacy liability are highly subjective insurance lines, and underwriters have a lot of leeway in setting prices. There are several factors that go into the cost of a policy, including the type of business, volume of personally identifiable information, protected health information, credit card data, and the organization’s existing security controls.

Who’s most at risk and why

Misplaced laptops used to be the top cause data loss and hacking. Today it’s the improper collection or use of personally identifiable information. Healthcare and financial services companies are currently among the most affected. Many business owners/operators don’t realize they own and are responsible for the information they collect from customers, clients and patients. And whether they store the collected data with a credible vendor or in the cloud, the business owner is ultimately responsible for keeping it secure.

We offer 8 tips to reduce the risk of a cyber attack and invite you to call us at 800-622-0737 for more information or a quote on a customized insurance program that fits your organization’s needs.

Source: Rosalie L. Donlong. Small, mid-sized businesses hit by 62% of all cyber attacks.  NOV 6 2015.
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