Cyber Security - Protect your Data!

Data is increasingly key to businesses, shaping everything from product development and marketing strategies to how a company builds relationships with its customer. But while data can make a business smarter, it can leave it exposed to cyber risk.
Loss of data, whether maliciously through a cyber-attack or as the result of an innocent mistake, can seriously affect a business. As well as generating fines of up to £500,000 under the Data Protection Act, a data breach can potentially put a company out of business. According to the Strategic Research Institute, if a company is unable to resume operations within 10 days of a data disaster, it is unlikely to survive.
Even where a business is able to get its operations back up relatively quickly, the cost of a data breach can be significant. Take a malicious cyber-attack as an example. Government figures show that the cost of the worst security breach can be as much as £1.15m for large businesses and £115,000 for smaller ones. And, whether malicious or an innocent mistake, the financial implications of a data breach are set to rise too. Under the European Commission’s General Data Protection
Regulation, which has been introduced in 2015, as well as higher fines, many are expecting tougher requirements when it comes to reporting data breaches.
Managing the risk
Taking steps to reduce the risk of a data breach is essential, especially as statistics indicate that most businesses have been affected. For instance, government figures found that 81% of large corporations and 60% of small businesses reported a security breach in 2014. To avoid becoming another statistic, robust security is vital to protect your data from cyber-attacks. As well as firewalls and virus detection software to keep the cyber criminals out, it’s sensible to have access controls. For example, using a virtual network when employees are signing in from home or distancing retail facing websites from the main systems to prevent someone hacking in.
It’s also important to ensure that, whether lost or stolen, data is of little value to a third party. Ensuring it is password protected and encrypted can help to make it worthless.
With data such an important part of many businesses, a structured approach to regularly backing it up is another must. Exactly what this entails will vary from business to business. For example, one firm may be happy to back-up data every day, storing it off-site so it’s not lost in the event of fire or flood. Another may prefer to have ghosted servers, where the data is continuously backed up to a computer in a remote location or in the cloud.
Insurance solutions
Ensuring data is well protected and regularly backed up will reduce the risk of a data breach and minimise the potential damage if data is stolen or lost. But, as cyber criminals are constantly developing new ways to get round security, it is almost impossible to completely remove this risk.
Cyber insurance can provide that final layer of protection. No standardised wording for cyber insurance is available in the UK, but typically cyber insurance could: help a business detect where the data breach has occurred and its nature; rebuild or recreate the data; cover the notification and credit monitoring costs; provide legal and PR support to minimise reputational damage; and cover any losses if the business cannot operate due to the breach. Depending on the type of cover it may also extend to third party liability, which would pick up the costs if a policyholder compromises another entity’s data. Taking this multi-tiered approach to protecting data is essential. With data becoming increasingly important to a business, and the data protection regulations getting tougher, few firms can afford to leave themselves open to this risk.
What next?
If you would like to find out more about data protection and cyber liability insurance, please do not hesitate to contact us.
01789 761 660

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