Cyber Insurance Continued

By Shawn McDonald

Let’s talk briefly about what cyber risks are and how they can affect your computer systems and your business.  When I think of a hacker my mind conjures up an image of an antisocial genius staring at the glow of a monitor in a poorly lit room cluttered with computer hardware.  The fact is that hackers have spread across the world.  Some are thrill seekers, some have political or personal agendas, some are criminals looking to score big bucks, and others work for nation states for political purposes.  Hackers and hacking have changed the way businesses large and small as well as insurance companies across the globe run their organizations. 

The largest risk business owners face by hackers is the loss of private information.  This includes customer information like credit card data, social security numbers, and medical records to name a few.  Also at risk are company records like employee information, trade secrets, and other proprietary information.

A Symantec study states that 60% of all companies that experience a data breach file for bankruptcy.  The average cost per lost record is between $180 and $214 per record.  If your company has only 10,000 records compromised in a data breach the cost of this loss is going to be between $1,800,000 and $2,140,000!  Many businesses have 30,000, 50,000, 100,000 or more records stored in their computer systems.  It is easy to see how a data loss incident can balloon into a huge financial loss.

Hacking is the most recognizable and expensive cause of data loss but it is not the most common.  Simple human error accounts for the majority of data breaches.  A 2011 study by the Global Ponemon Institute stated that:

39% of data breach cases are from human error such as loosing laptops or flash drives.

37% are malicious and criminal attacks.

24% are system glitches, such as software updates which inadvertently expose sensitive private files.

Regardless of how sophisticated your security system may be little can be done to completely eliminate the risk of human error.

Thank you for reading.

To be continued soon…….