Sure, you can install antivirus programs. You can even go a step further and encrypt your data and heavily protect your passwords. In fact, these are but a few of many steps business owners can take to prevent cybersecurity breaches and subsequent data theft. But they aren’t foolproof.
Cyber criminals are advancing as fast as the technology built to stop them, and small firms are becoming increasingly vulnerable to attacks. Thus, one expert says small-business owners should also consider whether their insurance policies would cover the losses and damage.
“Most small-business packages don’t cover data breaches or really anything data related,” said Matt Cullina, chief executive of Identity Theft 911, a business and data risk management firm.
So how do you know whether your firm needs such coverage?
Start, Cullina says, by taking the appropriate preventive measures — password protection and data encryption — and not just because insurance companies will want to see due diligence.
Independent retailers are especially vulnerable, as they often handle tons of credit-card data on a day-to-day basis, but professional services firms such as law firms, accounting companies and dentistry practices are often blindsided by massive data breaches.
Most policies have two levels of coverage. First-party coverage accounts for the costs the business would have to lay out to respond to a loss of clients’ or employees’ private information.
Companies handling lots of private information may want to add third-party coverage, which usually covers legal defense costs. Those policies may also cover fines and penalties, as well as forensic costs, which would come in handy for those hoping to catch the cyber crooks who broke into their system.
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