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The High Cost of Data Breaches

Recently, many large companies have fallen prey to cybersecurity attacks. Businesses of all sizes have suffered the consequences of data breaches that are both expensive and harmful to a business’s brand and reputation.

As widely reported, Sony and Citibank were hit with large scale data breaches that resulted in the loss of huge amounts of data.

According to an NBC News report, however, these massive corporations are not alone in dealing with cyber-attacks – small businesses are just as susceptible. Unfortunately, smaller businesses are also commonly unprepared to deal with an attack – or stop one from happening in the first place.

Is Cyber Security Insurance the Answer?

Besides changing passwords regularly and purchasing encryption software, many small- and medium-size businesses are turning to cyber security insurance to defend against costly data breaches.

According to a story by the Boston Globe, companies like Target and major New York health insurance companies are investing in insurance that provides coverage in case of data loss. As more data breaches occur, companies large and small are growing more concerned about liability. In 2014 alone, sales of cyber security insurance climbed 20 percent.

The article also states that some of the more high profile cyber assaults cost American companies millions of dollars in 2014. Sony reported losses around $171 million. TJX Cos., which operates TJ Maxx and Marshalls department stores, estimated total losses around $180 million. Recently, a federal court ruled the FTC has standing to bring a lawsuit against Wyndham hotels for its role in three separate data breaches that occurred in less than two years.

For business owners, it can be challenging to assess your liability risk when it comes to cyber-attacks. Experts warn, however, that data breaches are only likely to increase. Insurance may be one way for business owners to protect their bottom line in the face of expensive cyber assaults.

Ocean Springs, Mississippi Business Lawyers

At Rushing & Guice, P.L.L.C., we help business owners and individuals safeguard what they have worked so hard to build. Call us today at (228) 374-2313 to discuss your goals.