Businesses rely heavily on the internet and big data to remain competitive. The very sustainability of their business operations depend on it. Although both the internet and big data can bring in streams of revenue, the digital world also exposes businesses to harmful data leaks. In this blog, we’ll discuss five main causes that create just the right scenario for a data leak to occur. By educating clients on the need for preventative measures in the realm of cybersecurity, insurance agents will be able to position their clients’ businesses for success. When combined with cyber insurance, your clients will have an effective shield against any losses associated with a cyber attack.
1. Weak Passwords Are #1 Cause for Data Leaks
A surprising 81 percent of data leaks occur because an outside source has been able to guess a password — this makes weak passwords the number one cause for data leaks. Cyber attackers use sophisticated algorithms to sift through the possible word combinations to gain access to a company’s system. Unfortunately, many users opt for simple passwords using a common word thereby making it more susceptible for the algorithm to narrow in on the correct answer. By lengthening the password, adding numbers and special characters, your client will go far in strengthening their password security. Additionally, your client should change their password every few months. Think of passwords as a lock to the door of one’s home — it’s either locked or not.
2. Social Engineering Are Planned Events
Social engineering is when an outside source impersonates someone else — usually a reputable company or person — in order to gain confidential information. Due to its sheer creativity, and convincing manner, social engineering can mislead employees to give out secured information. The most common type of social engineering are phishing emails. A phishing email can request users to update their account information via an unsecured form and website. Phishing emails embedded with just the right graphic design and logos can make it appear as if they came from a reputable company, which is precisely the reason phishing emails are one of the most common forms of data leaks. In fact, thousands of phishing emails are sent out each day. How can your client differentiate a phishing email from a reputable one? The number one tip you can give your client is to check the email address. Phishing emails usually contain words and numbers that a real company normally won’t use; this is because the domain name has already been taken.
3. How Physical Theft Exposes Company Data
When devices are stolen, it can start with a harmless mistake. For example, someone may leave their laptop at a coffee shop and simply not remember in time to retrieve it. Lost devices often become stolen devices, and when the device lands in the wrong hands, it gives rise to a cyber incident. When a thief has access to confidential data, such as a customer’s bank account, the person can easily become a victim to identity theft. In this case, a customer can file a claim in court against the company that had allowed the data leak to happen. Business owners can advise their employees on the best practices to use when handling a company’s equipment — especially those that have confidential data. In public spaces, don’t leave the company equipment unattended, even if it’s for a short break.
4. Lookout for Software Vulnerabilities
Software vulnerabilities also lead to data leaks. More specifically, a zero-day is a security hole in the software’s operating system; these usually stem from glitches and software bugs. In addition, vulnerabilities in software an allow attackers to bypass authentication protocols so that cyber attackers can gain unauthorized access to confidential data. What’s more, software vulnerabilities can serve as entry points for malware attacks.
Employees may not be aware of the advantages of frequently updating their software’s operating system with the latest versions. At first glance, these software updates may not seem necessary, but they are there to identify glitches and software bugs which have built-in security measures.
5. 3rd Party Data Breaches
Organizations often collaborate with external service providers, vendors, or partners who may have access to their data or systems. These collaborations can bring many benefits to both parties. But, at the same time, they can also introduce potential risks — especially if the third party fails to maintain adequate security measures. Inadequate security measures can include the following: lack of firewalls, outdated software, and insufficient employee training. In addition, if a vendor mishandles or improperly secures sensitive data, it can lead to data leaks. When sharing data with third-party vendors, organizations must make sure that appropriate data protection practices are followed.
Are the employees trained on cybersecurity protocols? Are softwares routinely updated? Are firewalls and antivirus softwares in place? Having these cybersecurity measures implemented can go a long way to preventing data breaches and data leaks.
Enhancing Cyber Security with Cyber Insurance
Even with all the precautions set in place, a company can still be exposed to a cyber attack where confidential information has been accessed, lost, and/or stolen. Insurance agents can advise their clients that a cyber insurance policy can protect them from the risk exposures that are tied to a cyberattack. A cyber insurance policy can protect your client with the following:
- Public Relations Expenses: When a cyber attack has occurred, the company faces damage to its reputation. In order to recover from the negative publicity, a company needs to initiate a strong public relations campaign in order to explain the event and how the company is proactively remedying the situation. A public relations campaign of this sort can be costly.
- Identity theft: Fraudsters open credit cards by using a customer’s personal information which results in unauthorized purchases. Depending on the extent of the unauthorized purchases, the amount can go as high as tens of thousands of dollars. A company would need to financially compensate the customers when an identity theft of this sort occurs.
- Damaged Equipment: A widespread malware attack can have a domino effect as the virus is spread from one device to another. After a cyber attack has occurred, a company may need to replace damaged equipment with new ones.
- Litigation Fees: Customers who have their personal information compromised may take the issue to court. Standard court fees amount to thousands of dollars.
Not all companies have the financial resources they need to respond to a cyber attack. However, it’s important to note that a safeguard is entirely within reach. Even without a dedicated pool of financial resources to tap into, a company can meet the expenses relating to the cyber attack. A cyber insurance policy will pay the fees for: litigation expenses, damaged equipment, identity theft, and more. Quaker Special Risk is the leading provider of cyber insurance, and we’re ready to assist you with any questions regarding cyber liability and more. Contact us for a quote.