A data breach is a security accident where data and other information have been stolen and used without authorization. A data breach can have catastrophic consequences for a small business. It is essential to protect your business information, especially customer information. Not having cyber liability insurance can result in the loss of revenue, fines and a tarnished reputation. Below is a breakdown of how data breaches can affect your business and the risks associated with it.
The Payment Card Industry Standards Council is a global forum that connects payment industry stakeholders to establish and inspire adoption of data security standards and resources for secure payments internationally. Your company may be fined by the Payment Card Industry Security Standards Council.
Another consequence of a data breach is a forensic investigation. Clearly, your business has been attacked and it must undergo an investigation to determine why your business was attacked. The purpose of the forensic investigation unveils evidence and further insights. Forensic investigations on data breaches can help the business understand why this happened to them and what they can do to avoid future attacks. The investigation can be expensive to cover out of pocket, and that’s why cyber liability insurance is a great thing to have.
In addition to fines and forensic investigations, future security costs also come along with the consequences of data breaches. After going through a cyber attack, businesses may need to invest in mandatory credit monitoring. This can help protect against any future attacks. Your business may also have to cover the costs of replacing customer cards, repairing identity theft and any other obligations that the Payment Card Industry will require.
You have built a relationship with your customers. They trusted you with their information and they expected to protect it as if it were your own. They had confidence in you that you would not let anything happen to their information. As a business, you have established a brand and a place in your community. When a business goes through a data breach it can tarnish the reputation they have built.
Businesses can restore a tarnished reputation due to a data breach. It’s important to be transparent about what happened. Making a statement about including the details of the data breach and what you are doing as a business to resolve the problem will show that you care for your customers and that you are doing everything in your power to ensure that this will not happen again in the future.