Whether your business is a Fortune 500 company or a small, family-run business, data security needs to be a top priority. Small and medium-sized businesses are becoming more frequent victims of data breaches, whether through their own negligence or the efforts of malicious attacks.
Unfortunately, it often takes the loss of hundreds of thousands of client records, and the ensuing costs, to make organizations recognize the importance of data security. The potential of losing the financial or personal information of just one customer should be enough to re-evaluate data policies and procedures in order to prevent such incidents. Don’t let your business be a victim. Take a proactive approach to data security by properly securing your data and protecting your exposure.
What’s at Risk?
In the unfortunate event that your organization experiences a data breach, there are a number of costs your business could incur. The cost of investigating and fixing the cause of the security breach can vary greatly depending on whether the incident was caused by employee error or a hard-to-detect flaw in your organization’s security measures.
The cost of notifying those whose information was compromised can also range in price. Provincial laws dictate how quickly those affected need to be notified and what civil or criminal penalties your business can experience if you fail to promptly notify the people involved. Furthermore, your organization may need to provide credit watches for the victims of the data breach to prevent identity theft. However, the loss of your client’s trust and the resulting loss of business could affect your organization the most.
Considering all factors, research conducted by the Ponemon Institute estimates the cost of a data security breach to be around $214 to $277 per compromised record. In total, the cost of a single data breach incident averages around $7.2 million.
Plan for Prevention
Risk management analysis and planning is still the best way to mitigate exposures, whether they are physical or digital. Even if your company is not one that falls under the definition of a financial institution or creditor, having a written identity theft prevention program is an excellent way to address the potential threat of data breaches leading to identity theft.
For effective data security risk management, the technical, legal, compliance and risk management teams of your organization need to work together effectively. Your organization should be aware of and in compliance with all regulations pertaining to data security in each area that your company does business. Technical operations team members need to be continuously evaluating, monitoring and testing data security measures and procedures to stay one step ahead. Seriously consider the amount of risk your company has taken on and what risk you can transfer through technology-related policies, including cyber liability and technology professional liability coverage.
Contact Axis Insurance Group for more information on data security and protecting your technological risk.
