The need for cybersecurity breach protection has escalated since the internet became mainstream. A business can be financially protected from one cyberattack with the proper insurance. Here’s a deeper look into what all business leaders should know about data breaches.
What Is a Cybersecurity Breach?
A cybersecurity breach occurs when an unauthorized third party accesses a private computing system. Several damage to a business involving its finances and reputation can occur when hackers penetrate its network. Not only can it disrupt the normal flow of business activity, it can lead to a loss in customers and multiple lawsuits.
Some hackers want to cause havoc by destroying data, while others seek valuable confidential financial information. The repercussions to a business from a breach can last for years if the company isn’t appropriately insured.
Causes of Data Breaches
Not every data breach happens due to a cyberattack. According to Verizon’s data breach report that year, hacking was a leading cause of data breaches in 2020. It accounted for 45 percent of data breaches. But other common reasons included human or technical errors, social attacks, and malware. Internal actors abusing the company system made the list as well.
Data Breaches and Small Businesses
Large companies have been the main targets of cybercriminals seeking to maximize financial gains. In fact, 72 percent of the breaches in 2020 impacted large firms. But the remaining 28 percent were small businesses hit by hackers. While large companies typically have sufficient resources and insurance to withstand a data breach, small companies can collapse overnight without proper coverage.
Data Breach Statistics: Cost, Frequency, Severity
The cost of data breaches globally was about $3.86 million on average in 2020. But in the United States, which has the costlier data breaches, the average was $8.64 million. These losses don’t include the impacts of business disruption. The average amount of time it took for companies to assess and resolve data breaches was 280 days.
The number of publicly-reported data breaches in 2020 was just under 4,000, nearly half the amount the previous year. But some of the reasons for this lower count were government reporting disruptions, delays, and reduced media coverage.
The severity of a data breach is most disastrous when a company lacks insurance protection. A standard business insurance policy may not be sufficient to cover all the legal costs of a data breach. It’s important to carry cyber insurance to pay legal fees, including settlements. It can also help you deal with recovery from a breach.
Protect Your Data Now with Riverbend Insurance
The best way small businesses can survive a data breach is to start with a solid cybersecurity policy, such as strong passwords. You also need to have the right cyber insurance coverage in place. At Riverbend Insurance, we can help you understand your options. Contact us to get in touch with our professionals, or call us directly at (855) 814-0308 to get a quote.