20 Sep Tips and Techniques: The Growing Threat of a Data Breach to Small to Mid-Sized Businesses

Did you know that 90% of all data breaches affect small businesses? Starkweather & Shepley Account Executive Jay M. Frechette digs deeper into the topic and includes tips on precautionary measures you can take. 

The saying goes, “It’s not IF you will have a data breach, it’s WHEN.”  With the marine industry quickly becoming a more digital industry, information can be a valuable asset.  Unfortunately this asset can also turn into a significant and costly liability if it falls into the wrong hands.

You have probably heard of some of the larger, high-profile attacks such as Sony, Target, Home Depot, or Chicago Yacht Club; but it’s not just Fortune 500 Companies that are being targeted.  According to Trustwave research, 90% of all data breaches effect small businesses.  This is due to lack of controls and low preparedness levels in these types of businesses.

There are five potential sources in which a data breach could occur:

  • Theft by malicious third parties (Hackers)SS logo
  • Virus threats
  • Physical and administrative mishandling (employee mistakes)
  • 1st Party “inside jobs” by a rogue employee
  • Violation of Federal, State or Local Privacy Laws

 

Data breach response costs for small businesses average $36,000 – $50,000.  This figure does not include costs that come from lawsuits, regulatory fines/penalties, or lost time and revenue due a damaged reputation.

Cyber Extortion (Ransomware) and Social Engineering (willfully wiring funds to what you think is a member of your organization, customer, or vendor) are two other rapidly increasing issues negatively effecting businesses.

Since most small businesses aren’t able to recover after security breaches, it is always a good option to keep precautionary measures ready against an attack.  The following tips can help make sure you are prepared for attacks against your business.

  • Work with an internal or 3rd party IT/network security company to ensure that the proper controls are in place.
  • Purchase a Cyber Liability and Breach Response Insurance Policy
    • These events are not covered by General Liability Policies
    • These policies have become much broader in coverage and more affordable for small to mid-sized businesses
  • Make sure your employees understand these threats and are trained as far as what to look for to avoid attacks.

 

–Article by Jay M. Frechette, Account Executive – Marine Risk Solutions, Starkweather & Shepley Insurance Brokerage, Inc. (401-435-3600 / jfrechette@starshep.com).

 

About Starkweather & Shepley Insurance Brokerage, Inc.

Our waterfront experience coupled with our market knowledge enable us to provide specialized coverage and personalized service. Our Claims Unit has the experience to navigate your claim for a timely resolution.

We employ insurance professionals with marine experience in placing insurance for:

  • Boatyards
  • Boat Builders
  • Shipyards
  • Vessel Operators

Starkweather & Shepley, working closely with industry groups and insurance carriers, has successfully developed national programs for:

  • ABBRAGARD:  A program designed exclusively for boat builders and repairers. Available only to members of the American Boat Builders & Repairers Association.
  • The Community Boating & Sailing School Program: Offered exclusively to organizations dedicated to sailing education.
  • The C-PORT Insurance Program: Available to operators of quick response towing and salvage vessels. Endorsed by C-PORT, the trade association for professional towing and salvage companies.