An IBM report from 2021 shows that data breach expenses increased from $3.86 million to $4.24 million, the highest average total cost in 17 years. While fraud is rising globally, the National Cyber Security Alliance discovered that 70% of all cyber-attacks target medium- and small-sized firms.
When your company is attacked by ransomware, the virus prevents access to your computer system and data. The situation can get nasty if you’re handling consumer data and it is hacked. A data breach affects your company’s image and long-term success, and you can be fined for not following state guidelines for informing the victims. Your business may also face lawsuits if the leakage results in stolen customer identities.
There are several ways to avoid paying substantial legal costs and recovery fees. Keep reading to see how you can manage this area of your online business and ensure customer safety.
Be wary of common data breach factors
Most businesses are vulnerable to data breaches even if their software is as secure as Fort Knox. Not even giants like Yahoo, Verizon and the British National Health Service could keep protecting all of their customers’ data.
Phishing is a prevalent online threat, especially mail phishing, which has been around since the 1990s. Hackers send these emails to whatever email address they can get their hands on. The email typically warns you that your account has been compromised and that you must reply quickly by accessing a provided URL.
Here are four other common types of data breaches you should be wary of:
- Password guessing. This is another easy yet extremely devastating issue that happens more frequently than expected. Some businesses post computer passwords on notes, allowing anybody to see them, which might lead to interfering workers accessing the data elsewhere. When passwords are so guessable that they get hacked, it’s called a brute-force attack.
- Stolen information. This shouldn’t sound absurd because it’s human to make errors, and your employees are susceptible to making them, too, especially if they don’t have good antivirus software and data security tools or if they weren’t adequately trained in this regard
- Ransomware. When you receive a message stating that your device has been hacked, you might be a victim of ransomware. You’ll most likely be asked to pay a fee to keep your data out of the public eye, and this can range from insignificant to hundreds of thousands of dollars.
- Reading keystrokes. Keyloggers, which record everything you and your employees type on computers, can be inserted into or emailed to you by cyber criminals. The data is subsequently handed back to hackers, who use it to get access to sensitive information.
Be aware of the implications of a data breach
It’s important to be aware of the fact that if a customer whose data you are managing suffers financial or emotional losses because you didn’t take proper care of it, they might make a claim.
According to specialists from Data Breach Claims, data malpractice happens when your clients’ data is disclosed, destroyed, accessed, lost, or changed without their consent or a lawful reason. Personal data includes bank details, names, emails, and other forms of sensitive data, and there are ways victims can demonstrate the damage that occurred unjustly, like medical bills.
Besides undesired lawsuits, here are other consequences of mishandling customer data:
- Forensic investigations. Forensic examinations. One of the repercussions of a data breach is that your company must conduct forensic research to discover the cause of the data leakage. These investigations frequently produce sound evidence that helps prevent future data breaches. However, in the near term, these investigations can be expensive.
- Future security costs. If your business is implicated in data leakage, you should use better security tools in the future, which come with additional charges. Besides them, you might face card replacement costs, identity theft repair, etc.
- Fines and fees. These may vary and come from card network brands or regulatory agencies.
Train your employees
Apple was a victim of this when an inattentive employee left a prototype of one of their new iPhones lying around. The specifications and hardware of the yet-to-be-released phone were all over the Internet within a few hours.
It’s pretty typical for employees to leave a phone, file or computer somewhere they shouldn’t and have data stolen. Such mistakes can jeopardise the new prototypes your company’s working on and customer data.
You can train your employees by showing them how to handle data and making them aware of the implications of mishandled information. Data security tools are also crucial when storing patients’ or clients’ data, and they can range from the firewall to IDS/IPS (Intrusion Detection and Prevention Systems). Here are four relevant examples:
- Backup and recovery. This is a solution that helps your company protect backup data in case the original one is destroyed or deleted, and all of your business assets should be duplicated regularly to prevent them from malicious or server failure damage.
- Intrusion Detection and Prevention Systems. Such systems can be configured to examine system event logs, monitor suspected network activity, and provide warnings about sessions that appear to break security settings or terminate seemingly malicious sessions.
- Data discovery and classification. This tool scans your data to determine which information you deem essential, according to your custom requirements or industry standards, like IP and GDPR data.
- Firewall. This method isolates one network from another, excluding undesirable traffic from entering the network and allowing less room for hackers to crack your systems’ codes.
According to a survey from data security vendor Varonis Systems, the typical data breach for a small organization can cost $179,000 in recovery expenses.
Your business is certainly unprepared to deal with the aftermath of a cyber breach or a lawsuit from victims. Therefore, a good tip is to get cybersecurity insurance if you don’t have good security practices or handle highly sensitive customer data.
There are two types:
- First-party cybersecurity insurance. This covers businesses that have been hacked and had their data stolen and is usually available as separate insurance or as an add-on to a company owner’s coverage.
- Third-party cybersecurity insurance. This can protect your business if it’s in charge of another company’s data, like an IT consulting firm. If a client sues an IT company claiming that its activities (or inactivity) caused a data breach, third-party cyber liability insurance can cover legal fees.
