In the modern-day business world, most companies have the need to hang on to certain information from their clients. The purpose of this can range from requested automatic billings to simply sending out bi-monthly newsletters. Sadly, this presents a real danger to companies due to the possibility of data breaches. The consequences of these breaches can be detrimental, so it's imperative for business owners to know how to protect themselves.
How Data can be Breached
There are two ways in which a data breach can occur, and it's important for a business owner to take measures to protect against both. The first, and in many cases, the most common, type of data breach is an internal breach. This occurs when someone within a company abuses their access privileges and, often maliciously, uses company data.
The second type of data breach, and usually the most feared, is an external breach. This can occur when hackers or other online criminals manage to gain access to a company's network by using illegal methods. Either of these two breaches can prove detrimental to a company, and they're not as uncommon as some business owners would like to think.
Data Breach Statistics
The statistics related to data breaches are, in a word, disheartening. Data has shown that around 232.4 million people in the world had aspects of their identities, including financial and personal information, revealed due to data breaches in 2011. Of these breaches, around 40 percent were considered "malicious". This means that they were due to the aforementioned internal and external breaches.
It's also important to note that no business is safe from this danger. It's been shown that around 70 percent of all data breaches have occurred to businesses with fewer than 100 employees. This means that regardless of how large a company becomes or how localized it stays, it may face data breaches which could lead to serious financial consequences.
Avoiding Financial Ruin after a Data Breach
Companies that suffer a data breach will likely endure harsh financial penalties. It's usually the case that they'll be coerced, if not outright forced, to pay for identity fraud protection services for all of their clients whose information was exposed. Additionally, clients may be allowed to sue a company for damages; this is especially likely if they suffer financial issues due to their identity being revealed.
Other than using network protection services, such as anti-virus software, and implementing stringent security measures at a company, a business owner can also purchase data breach or data loss insurance. These policies will help pay for court costs, judgments, and even identity protection services if a data breach occurs. This type of insurance is absolutely essential for any business owner who ever has client data on file. A single data breach can destroy your entire company. Give Smith Davidson Agency a call today at 713-771-3973 to ensure that your company is fully protected with Houston Business Insurance.