Data breaches can cause severe financial damages to a business

Technology continues to evolve more every day, and businesses across all industries are becoming more reliant on the developing systems. It's important for companies to take the necessary precautions, ensuring that even if something like a data breach happens, they have the proper insurance coverage in place to respond to an incident.

Millions of dollars in repair costs - or cleanup from fraudulent transactions - could severely hinder a technology company's daily operations and harm its long-term outlook. Making sure that there is a comprehensive technology insurance policy in place can provide a sense of comfort to any business that relies on technological innovation to generate profits because it will protect their tangible and intangible assets, including data. Any time that a business loses control of information - even if the data is not used for fraudulent purposes - a security breach has occurred.

That is what South Carolina's Department of Revenue is currently experiencing, as at the end of October, the agency reported a massive data breach, exposing millions of individuals' personal information and data from hundreds of thousands of businesses.

According to state governor Nikki Haley, 3.8 million individual tax filers and 699,000 businesses should assume their entire reports were accessed.

"Could South Carolina have done a better job? Absolutely, or we would not be standing here," Haley said in releasing a report from Mandiant, a computer security firm hired to close the gap and determine what happened.

The Associated Press reported that a cyber thief took 3.3 million unencrypted bank account numbers, as well as 5,000 expired credit card numbers. The attack is believed to be the largest in the nation's history, after the theft of patient data from the state's Medicaid agency earlier this year.  

It's important to conduct a thorough risk management analysis to determine which comprehensive technology insurance policy is right for a business. A thorough insurance plan can help in areas including identity theft services for the affected clients or employees of a business, defense for lawsuits and indemnity for affected individuals. Also, PR services can be included, which will help restore the image of the disparaged company.

 

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