Originally posted 1/25/22 - Updated 9/20/22
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You do everything you possibly can to protect customer data. But is it really enough? These days, it isn’t a matter of if your business will encounter a data breach—it’s when.
Take Yahoo as an example. In 2013, the internet company experienced a major data breach. As a company that should have been ready for such a crime, over three billion records were still affected.
This tells you that it could happen to anyone, no matter how small or big your company is. And since the COVID-19 pandemic, hackers have become more eager and desperate to steal information.
Instead of worrying, it is better to be prepared for this type of issue. Here’s what you need to know about data breach insurance and why it is so important for your business.
Once you know you’ve experienced a data breach, the idea is to not necessarily recover what has been stolen, but instead stop more data from being lost, reducing the damage. This is where adding data breach insurance to your cyber insurance policy for your business can help.
What to Do After a Data Breach
After a data breach is confirmed to have occurred, there are several steps that need to take place. First, all employees should change and strengthen their login credentials in all systems. This will keep any further breaches from happening, even if you don’t know exactly where the issue occurred.
Additionally, clients and customers affected by a cyberattack must receive an urgent notification. This is important, as it is a legal requirement, and ensures individuals have time to monitor their personal information for evidence of any identity theft. Likewise, they should also update any passwords or pin codes associated with your platform.
Finally, the business affected should continue to monitor its own accounts and offer to pay for credit monitoring services for any customers, clients, employees, or vendors affected by the data breach, which is covered by data breach insurance.
What Does Data Breach Insurance Cover?
When deciding to purchase data breach insurance for your business, it is important to know what facets of protection it actually provides. This way, you’ll know what to expect if you’re ever in a position where large amounts of consumer data are being compromised.
Data Breach Insurance Offers:
- Assistance with setting up an automated notification system for customers impacted by a data breach. Getting the word out to affected parties is important and the easiest way is often with automated tools.
- Funds to hire a public relations team to help after a data breach. After a breach, your company’s reputation is greatly at risk. With a dedicated team to help out, you can reduce the long-term damage to public trust.
- Payout to cover any additional business expenses and make up for the loss of income related to the data breach. Often, the data breach itself is just the start of what’s necessary for fixing the damage of a data breach. You might even lose a considerable amount of new customers and sales due to the issue.
Wrap-Up: Should I Add Data Breach Insurance to My Policy?
While there is no way to prevent cybercrime altogether, you can mitigate the risk of crime with an insurance policy for your business that covers you if such an event took place.
Combining cyber insurance coverage that includes data breach protection specifically, with proper preparation ahead of time for such an attack, even one you think will never come, can be the perfect way to combat losing millions of dollars, your reputation, and your customers. Reach out to our team at Winter-Dent today for more information or if you have any questions you would like to discuss.
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