Even with the best intentions, mistakes can happen, and it is important for businesses of all sizes to be prepared. Not only can a comprehensive business policy protect company owners, it can also protect their customers. With so many organizations becoming reliant on mobile devices and cloud technology, cyber criminals are also becoming more common. One small instance of lost consumer data could cause a business thousands of dollars in a cleanup process.
In a survey commissioned by The Hartford Steam Boiler and conducted by the Ponemon Institute, nearly 85 percent of small business owners - companies that made less than $10 million in annual revenue - share customer and employee records with third parties including those providing billing, payroll and employee benefits.
The research found that 55 percent of respondents have had a data breach, almost all involving electronic records, and 53 percent had multiple breaches. However, 70 percent of small business owners said that they would purchase insurance if it would help cover the costs of a data breach.
"Smaller companies are targeted by data thieves, but they often don't know how to respond when sensitive information they keep on customers and employees is lost or stolen," Eric Cernak, vice president for Hartford Steam Boiler, said in a press release. "Failing to act in a timely and effective way can harm the reputation of businesses and even risk legal penalties in many states."
The most common causes of security breaches were from employee or contractor mistakes - lost or stolen laptops, smart phones and storage media - and procedural mistakes.
Working with commercial insurance specialists can be of great assistance to all kinds of business owners. Whether a company is large or small, investing in technology insurance that accounts for the possibility of a data breach - however temporary - could have long-lasting benefits.