Posted on Monday, April 06, 2015 in Broadband InternetBlog written by Rob Swenson
Data breaches have become the No. 1 threat to the well-being of businesses in the United States, according to a national insurance expert.
Regardless of whether a breach is the result of malicious activity or an accident, the potential damages to a company’s reputation and bottom line are enormous, says Allen Cross, vice president of sales for INSUREtrust, an insurance wholesaler based in the Atlanta area.
No business is exempt, Cross says.
“A lot people seem to think they’re flying under the radar. No one is flying under the radar. No one is too small,” he says.
Cross spoke March 24 to about 30 people at a Business Sense Workshop hosted by the Sioux Falls Area Chamber of Commerce. His appearance was sponsored by Fischer Rounds & Associates Inc., which has a branch in Sioux Falls.
“Cyber risk has become a real common topic. It’s the hottest topic out there,” says Jeff Pray, an insurance agent with Fischer Rounds.
“Economic thought leaders have warned of a digital disintegration, a scenario in which cyberspace could be completely undermined due to strengthening attacks where the Internet is no longer a trusted medium for communication or commerce, at a huge cost to economies and societies,” according to the Institute.
“Businesses across a wide range of industry sectors are exposed to potentially enormous physical losses as well as liabilities and costs as a result of cyberattacks and data breaches,” the Institute reports.
Anthem, one of the nation’s largest health insurers, was a victim of one of the most recent major hacks. Other big-name victims of the past year have included Sony Pictures, Staples, Kmart, JP Morgan Chase, Jimmy John’s, Home Depot, Goodwill Industries and United Parcel Service.
Health-care and educational institutions are becoming especially popular targets.
Businesses aren’t just victimized by outside hackers, Cross points out. Information also can be released by rogue employees or through inadvertent, in-house actions, such as an employee clicking onto an infected link in an email or losing a mobile storage device containing sensitive information.
The Internet has only existed as a business communications tool for about 20 years. Threats to data have exploded in frequency over the past five years, Cross says.
The number of data breaches in the United States tracked in 2014 hit a record high of 783 in 2014, according to the Identity Theft Resource Center in San Diego. An ITRC report sponsored by IDT911 Consulting indicated the number of breaches in 2014 was an increase of 27.5 percent from 2013. Since 2005, more than 5,000 breaches involving an estimated 675 million records have occurred.
Obviously, businesses must do more in advance to protect their electronic assets and client information entrusted to them.
Cross offered some risk-management suggestions including:
- Assess who has access to data.
- Establish data storage protocols.
- Encrypt most data.
- Establish a policy for using portable devices.
- Train employees well.
- Comply with regulations.
To better understand their potential exposure, Cross suggests that businesses answer these questions:
- What sensitive data does the enterprise have?
- Could data be released accidentally as well as maliciously?
- Is sensitive data stored on laptops?
- What indemnity do vendors provide?
- What would be the result of a data breach to the enterprise?
Some businesses might want to consider data breach insurance, which is a relatively young product. It’s been around for 10 or 12 years, Cross says. Typically, general liability insurance does not cover cyber breaches, he says.
Companies such as SDN Communications also can help businesses and institutions protect their data. In addition to providing broadband connectivity, SDN offers a variety of communications products and services to help transport, track, store and secure electronic information.
Organization representatives interested in a consultation should contact an account executive or technical support staff member at SDN. Just call 800-247-1442 or reach out through the contact us form on the SDN website.