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Cyber Liability is now a BUZZ word. Business owners would like to think that security breaches are a thing of the past, but threats continue to escalate. But WHY? As a society, we are so dependent on technology. Over 40 percent of the world’s population has access to internet connection.
With so many advances in technology, one would think that this also means advances in security against data theft. Unfortunately, this is not the case. Identity theft is on the rise, and security breaches are still ever-present. The need for cyber protection should no longer be just an option, but rather, it should be considered part of your insurance portfolio.
Most business owners have a basic understanding of their computer systems and how they work; but when you start using lingo such as firewall, back door, patch and anti-malware, eyes tend to glaze over. Hackers, however, have a sophisticated understanding of these terms and can use this knowledge for deceitful purposes.
So, what could a hacker gain by breaking into your system?
The retail industry is very susceptible to identity theft due to the amount of personal information kept on every customer. Typically, salon owners do not require members to disclose personal data such as Social Security numbers. But, when you collect any type of private info from a salon guest, it’s your responsibility to protect it from being compromised.
Identity theft has expanded to involve more than just stealing banking and credit card information – it now includes theft of email addresses, logins, passwords and other electronic data. Examples of data elements that can identify an individual include name, fingerprints or other biometric (including genetic) data, email addresses, phone numbers or Social Security numbers.
It is becoming increasingly common for salon owners to now use EFT for membership payments, meaning they maintain checking account or credit card info for many people. A cyberattack or data breach puts your clients’ financial information at risk and unfortunately, something as seemingly harmless as an email address can be used to obtain it.
Hackers love to steal email addresses. They take your customers’ information, pose as your business and send emails phishing for info. Let’s say their membership payment is past due. This is a perfect scenario for the hacker to send a “late payment notice” requesting banking info to avoid cancelation. Can you see your customers falling for this scam? What if this email goes out to your entire database? It paints a pretty scary picture.
Even if a financial loss is not actually suffered, the “cleanup” from a cyberattack can be equally devastating. How would you pay for the costs incurred by customers/other third parties? Repairing/replacing computer systems or lost data could be extremely expensive and could impact your regular business operations. A data breach could make you liable for claims by those whose info was stolen, and you could be subject to administrative action, such as investigation. Costs to defend your business in these types of situations can be very high.
It’s important to find out how the hacker got into your system and quickly remedy the problem. If proper insurance protection is not secured prior to a data breach occurrence, your business could be in jeopardy due to recovery and reimbursement costs, as well as damage to your reputation.
Fortunately, you can protect your business from identity theft and security breaches. Corporate Identity and Data Theft Protection are available as an additional coverage to many business insurance policies. Stand-alone cyber policies can also offer a broad range of coverage, and some policies offer prevention techniques in addition to protection.
Talk to your specialized insurance agent to learn how you can put Cyber Liability and Data Protection in your insurance budget. Not all policies are created equal, so it is really important to make sure that your policy covers your specific needs.
When you collect any type of private info from a salon guest, it’s your responsibility to protect it from being compromised.
Vice President of Universal Insurance Programs, based in Phoenix, AZ. She works with new and existing salon owners to determine and provide insurance coverage for their unique business models. Contact Jenny with any questions regarding your insurance at 800.844.2101 x1480 or email firstname.lastname@example.org.
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