True Cost of Data Breach

When you think of data breach or information hacking you, like most people, think Target, Sony, Ashley Madison or some other big corporation where the headlines stole the show or you were personally victimized by the attack. I was hit by the attack on Target in 2014, like many millions of Americans, fortunately Target has systems in place to allow for a quick response and in reality I didn't feel too victimized.

Unfortunately, the data breaches that make headlines, the ones targeting Fortune 500 or 100 companies only account for 10% of the estimated 1.5 million attacks (2015 estimate), the other 90% are on small and medium size business.

Restaurants, law offices, contractors, manufacturers are all at risk for these attacks. You may be thinking "I don't have any information anyone could use.", but do you take payments by credit card? What about keeping information for your clients on file to make processing orders easy? Do you have a POS system to take payment? Those are vulnerabilities hackers use to get the information they want.

What if you click on an email and your system is taken over by ransomware? A new form of cyber crime that will hold you system hostage until they get a specified amount of money. In one case a hospital had to pay $150,000 to get access to their files.

What does a data breach cost a small business? In 2015 the average cost of a data breach for a small business was $36,000 and many exceeded $50,000. Those costs include:

    Mandatory Forensic Examination
    Notification of customers
    Credit monitoring for affected customers
    PCI compliance fines
    Liability for fraud charges
    Card replacement costs
    Upgrading or replacement of POS systems
    Reassessment of PCI compliance

Beyond those hard costs is the damage to your brand and business reputation. Of the small businesses that were affected over 31% of customers terminated their relationship with that business.

The bottom line is simply can you, as a business owner, afford to pay out $36-50,000 and then lost 1/3 of your business due to data breach and hacking?

If the answer is no, then the time is now to ask your agent about protecting your business for 21st century threats.

(Statistics provided by First Data Market Insight)

Darryl Stidham is a licensed producing agent specializing in Business and Commercial Risk Management in the state of Florida for Walden Insurance Network

1 Comments

Sm0k3r said...
This is the nonsense they are trying to get Matthew Keys with - they want a million dollars in damages. All the documents are up on his lawyers site www.jayleiderman.com

MONDAY, MAY 30 2016 7:35 PM