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Data Breaches: The $36,000 Threat Facing Your Small Business

Data Breaches: The $36,000 Threat Facing Your Small Business

As the role technology plays in our lives, both personal and professional, continues to expand, the privacy and security of our data becomes even more important, and the threat that data breaches and cyber crime poses grows more and more significant.

Here in Massachusetts, we are no strangers to data breaches.

In 2015, over 1.3 million MA residents had their private data compromised, a 400% increase from 2014 and the highest number ever since the state started monitoring data breaches.

Typically, past news about data breaches has focused on large, one-off incidents involving large corporations, such as the Target customer data breach of 2013 that Target recently settled for nearly $40 million.

However, as the Boston Globe recently reported, MA residents have had their data compromised in the past year via a variety of different organizations, including universities, pharmacies, health insurance companies, and more.

This included more than credit and debit card numbers that were compromised; addresses, Social Security numbers, medical records, and more sensitive and private information was compromised in 2015.

And while we often think of data breaches and customer data getting compromised in the context of events involving large corporations, hospitals, governments, and other “big” targets, the same Globe report discussed how hackers and criminals have begun targeting smaller organizations and businesses.

As the report mentioned, these criminals have come to realize that many small businesses have the same kind of sensitive and valuable data, such as credit card numbers and addresses, that large corporations and institutions have.

However, small businesses typically have less sophisticated security and data storing measures in place, making them ideal targets.

hacker data breaches ma small business

From a criminal’s perspective, if two potential targets have similar value, but one will be significantly easier to attack, it makes sense to go after the easy option.

As a small business owner, this should be a cause for concern.

A report by First Data illustrates the serious costs that data breaches have for small businesses, and with 90% of data breaches impacting small businesses, the likelihood of having to deal with a data breach is not insignificant.

The report breaks down the costs a small business faces after a data breach, which can include mandatory forensic investigations, credit monitoring for customers, customer notification costs, compliance fines, card replacement costs, liability and lawsuits, upgrading and revamping POS (point of sale) systems, and being reassessed for compliance and security measures on those POS systems.

The average cost for a data breach to a small business:

$36,000

The report discussed the non-monetary direct consequences of data breaches to small businesses as well, citing decreased customer confidence (31% of customers ended their relationship with the business), bad press, loss of business owner’s time, and the possibility of losing the ability to accept credit and debit cards.

It’s clear that data breaches aren’t just an issue for big organizations like Target or HMOs to worry about. Small businesses must protect themselves, and their customers, against data breaches.

So besides utilizing up to date technology and security systems, and training employees in data security as needed, what can a small business owner do to protect his/her business and reputation?

We are proud to offer a solution for small business owners that addresses these types of threats:

Data Breach & Privacy Liability Insurance.

This coverage is effective and affordable. The minimum premiums start as low as $1,000 per year for a $1,000,000 coverage limit.

With the average cost of a data breach at a small business exceeding $35,000, and 90% data breaches impacting small businesses, this level of protection for less than $100/month is a no-brainer.

Begin protecting your business against data and cyber threats today by starting your free quote, or give Bruce Thompson, Vice President of Business Insurance at Sampson Insurance Agency, a call at 781-927-7120 today.

Contact Us:

Sampson Insurance Agency LLC
14 Franklin Street
Quincy, Massachusetts 02169
Fax: 781-682-9740

Office Hours: 8:30AM - 4:30PM

781-927-7100

800-585-1905


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