What is a Data Breach?
A data breach is a cybercrime in which sensitive and confidential information is accessed without authorization. Data breaches are not a new trend, and they have historically been responsible for many cyber-related losses. But as technology evolves at the speed and efficacy that we are seeing; data breaches are not only increasingly common but have become a simple task for cybercriminals. Hackers seek personally identifiable information to steal money via wire fraud, compromise identities, or hold information at ransom.
Sensitive information is one of the most critical assets for any business. Standard property policies do not cover data compromises and the financial and reputational damages that can be incurred. Cyber policies provide comprehensive cover for these events, including notification costs, data restoration, and re-creation. The costs of notifying compromised customers can be extremely high, as can data restoration if backup systems are not adequate.
Data breaches can happen to anyone, whether they are a small business or a large corporation. Common data breaches include identity theft crimes, such as using stolen credit card numbers or social security numbers. Data breaches are also an issue for large corporations, as customer lists and corporate information can be stolen and held for significantly high ransom demands.
Anyone who commits a data breach by viewing or stealing private and personal data has committed a crime. A data breach can damage the reputation of the company and an individual in several ways. Surface-level financial damage is often only the first component of cyber loss. Reputational damage is a typical result following a data breach, which can be a timely and costly problem to fix. Customers may wish to transfer their business to a competitor who has not been involved in a data breach and is, therefore, more effective at securing third-party data.
How to Prevent a Data Breach?
Unfortunately, there is no one way to prevent data breaches entirely. The only way to attempt to avoid data breaches is by enforcing standard security practices. It is essential to follow these steps to protect your company and the personal information of yourself and your staff. Common security practices include:
Use of strong, secure passwords – Passwords should be complex and changed every 4/6 weeks.
Implementation of multi-factor authentication (MFA) across organizations.
Monitor financial accounts – Be sure to check accounts regularly and report any unfamiliar activity.
Use only secure URLs – You should never enter financial or personal information to any website unless the site begins with HTTPS://
Use of malware protection programs – Ensure to install malware and virus protection, update them regularly, and
Data must be backed up securely. All files and data stored on systems must utilize adequate backups using cloud and offsite solutions.
Mandatory training and awareness programs for all employees, ensuring staff members are educated on data breaches and the varying types of cyber-attacks that impact businesses today.
Regular monitoring of an organization’s RDP exposure.
Additional measures can also be completed by corporations, including encryption of sensitive data.
How Can AM RE Help?
Cyber policies are designed to help cover multiple costs following a data breach. Restoring organizations’ networks, assisting in costs to decrypt files, notification and PR fees and ransomware payments are all key areas that can be addressed to ensure minimal financial and reputational damage to businesses.
At AM RE, we work as a reinsurance intermediary offering Property Casualty treaty reinsurance traditionally using a Quota Share model. We are here to help support our clients in the event of a data breach or cybercrime incident.
We cover first and third-party data breaches, cybercrime, extortion, system damage, media liability, and business interruption. We work closely with claims adjusters and incident response specialists to gain insight into multiple risk portfolios. As capacity tightens within the cyber market, AM RE recognizes the requirement for alternative and comprehensive solutions. We provide a tailored and detailed approach for this class of business, supporting the portfolios of our insurance partners.