Small Business Insurance For Data Loss and Security Breach

The Hartford has recently announced a new insurance product specially tailored to fit small business for data loss and security breach. It has been touted as more affordable for the smaller business owner.  More and more small businesses are experiencing the devastating effects of a security breach incident or data loss.  The statistics and stories are well reported from various sources.  Experts agree that costs can exceed $200 per lost page of data.  This can cripple a small business and leave it exposed to lawsuits and litigation.

The front line defense to data loss and security breach risks should always be a good security and privacy plan. A technology attorney working in conjunction with your IT support can develop and help implement an effective security and privacy plan. The process of developing and implementing such plans often reveal the problem areas for any business.  Nevertheless, at the end of the day, there is no 100% fail safe plan to secure data, whether the data is on the cloud or in a server in the office.  There are also unavoidable risks associated with paper documents.  Likewise, there is no plan to provide 100% protection to paper documents.  That is why insurance is a good choice to cover the unavoidable risks.

In addition to providing valuable financial protection in the event of a covered incident, the underwriting and application process for data loss insurance will often require best practices.  This process alone will substantially reduce the likelihood of a significant data loss incident. Accordingly, small businesses should consider a three step process for data loss and security breach:

1. Develop and implement a security and privacy plan

2. Implement best practices as part of insurance application process

3.  Purchase and maintain data loss insurance

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