Thanksgiving is the gateway to the holiday shopping season and a bigger piece of the shopping pie is moving online. USA Today reported that 2013 Cyber Monday sales rose 16 percent to a record $2.29 billion, according to Adobe Systems, which tracks activity on roughly 2,000 U.S. retail websites.
The takeaway: Online shopping is growing fast. Unfortunately online crime is growing too. According to the Identity Theft Resource Center, data breaches are up 20.5 percent this year over 2013. In the last few months, the news has been riddled with reports of cybercrime, and apparently, not even the U.S Postal Service is safe from attack!
Are your cyber defenses evolving with the threats?
If you developed a cyber risk management strategy a few years back, it’s probably dangerously outdated. It’s easy for a small business owner to get complacent, believing that cyber criminals are only interested in the “big fish” like Target and Home Depot. But the cyber game is constantly changing.
- The outside threat is huge – even for small business! Larger companies are beefing up their own cyber security, so cyber criminals are increasingly going after smaller businesses, which are generally an easier target. Businesses are especially vulnerable during holiday shopping seasons – particularly if their IT networks are not prepared for increased volume. Whether it’s a system failure or a cyber hack, going offline on Cyber Monday could be devastating. The volume of online shoppers could be 10 times higher than usual so it’s important that retailers have tested back-up plans in place such as redundancy through a third party cloud service provider.
- The threat from within is equally daunting! Unintended disclosure and paper records are the two most common sources of data breaches according to a study of more than 1,500 data breaches in 2013 and 2014 by a unit of Beazley P.L.C. Malware/spyware-related data breaches increased by 20 percent between 2013 and 2014, and because of the high forensic costs involved, these breaches are on average 4.5 times more costly than those caused by unintended disclosure. And last but not least, disgruntled workers are increasingly targeting current or former employers using Internet cloud services and various computer hacking tools, according to the FBI and the Department of Homeland Security. Stealing trade secrets and other data, they can cost companies thousands, and even millions of dollars.
- Cyber insurance has become an essential component of doing business. As cyber threats have evolved, so have cyber liability insurance coverage options. Just remember, there is no one-size-fits-all cyber insurance policy. So how do you make sure you’re protected? Here are a few tips:
- Work with a risk management expert to identify your unique risks and coverage needs. Your Heffernan representative is ready to assist.
- Never assume you’re covered, since a typical business insurance policy won’t cover most cyber exposures.
- Match coverage to your business practices. If you use cloud computing or vendors for hosting and processing data, a cyber-risk policy can be tailored to reflect that. If you handle credit card information, make sure you’re covered for fraudulent card charges and fines.
- Notify your insurance provider immediately if you suffer a data breach. Costs for computer forensics, attorneys, and other consultants add up fast, and providing proper notice increases your odds of being covered.
- Complete insurance applications carefully, since errors can lead to denied claims.
A data breach can have serious reputational and financial impact for your business – particularly if it happens on Cyber Monday! To find out what you need to defend against these evolving threats, check out our business insurance page or contact a risk management expert today.