Small businesses are becoming increasingly susceptible to data breaches, which can have a profound impact on their ability to continue trading.
Cybercrime is expensive, costing New Zealanders more than $16 million per year.
And with thousands of attacks on small New Zealand businesses each year, ‘will I get breached?’ to ‘when will my data get breached?’.
Hackers are increasingly using innovative new methods to get sensitive information from your business. A small flaw in your systems can lead to a huge data breach if it isn’t addressed properly.
Many small business owners don’t pay enough attention to modern security threats because they aren’t aware of their existence.
This article will put the spotlight on the very real threat of data breaches and will be diving in to answer some of the most frequently asked questions.
- What is the cause of a data breach?
- What does a data breach mean for me?
- What can I do prevent data breaches?
- What protections can I put in place if a data breach occurs?
Before we move on, let’s first define data breaches.
What is a Data Breach?
A data breach occurs when confidential, sensitive or protected information is made available to an unauthorised person. Files in a data breach can be viewed or shared by anyone without permission.
Data breaches can happen to anyone, from individuals to governments and high-ranking companies. Even more important, anyone can expose others to risk if they don’t have their data protected.
Small businesses are increasingly the target of data breaches. This is due to a several factors, including underestimating the risk and not having proper safeguards in place.
In general, data breaches happen due to weaknesses in technology and user behaviour.
Data can slip through more places as computers and mobile phones have more connectivity features. We are constantly creating new technologies faster than we can protect them.
The IoT sector’s devices are a clear example of how we value convenience over security.
Many smart home products are plagued by flaws like a lack of encryption. Hackers are exploiting these flaws.
It’s likely that this issue will become more prevalent as new digital products, tools, and services are used without any security testing.
Even if all the technology is in place, users may still be prone to poor digital habits. It takes just one person to compromise a business’s data.
Understanding how data breaches occur is key to protecting yourself and others.
How do data breaches happen?
Knowing how data breaches can happen and the methods cybercriminals use are the first steps to understanding how to prevent a breach.
Here are some ways a data breach could occur:
An accidental insider – An employee might use a computer to access files and read them without the appropriate authorisation permissions. Access is not intended and no information is given. The data was however viewed by an unauthorised person and is therefore considered to be breached.
Malicious insider – Someone who accesses or shares data in order to cause harm to individuals or businesses. Although the malicious insider may be authorised to access the data, the intention is to use it in criminal ways.
Stolen or lost devices – Any unencrypted or unlocked laptop, external hard drive or other device that holds sensitive information goes missing.
Malicious outside criminals – Cybercriminals outside your business who use a variety of methods to get data.
While it’s essential to categorise who is likely to conduct a data breach attack, it’s perhaps even more important to understand how they plan to do it. These are some of the most popular data breach methods:
Phishing- Phishing attacks are intended to trick you into causing data breaches. To deceive you, phishing attackers pretend to be people or organisations that you trust. These criminals will try to get you to give the data to them or to gain access to your sensitive data.
Brute force attacks – Hackers might use software tools to guess passwords. Essentially, they go through every possible password option until they get it right. Although these attacks can take some time, they have become more rapid with the increase in computer speed and software available.
Malware – Security flaws can exist in your device’s operating system and software. Criminals use these security gaps to insert malware – technology designed to be used in data breaches. Malware is ideal for stealing private information while remaining undetected. This infection might not be detected until it is too late.
How to prevent an attack
Your entire business needs to be involved in data breach prevention, from IT staff to end-users and everyone in between.
Each person who interacts with the system could be vulnerable and your security is only as good as its weakest link.
These are some best practices to prevent data breaches:
- Software updates and patches are available as soon as they become available.
- Secure data encryption – where data is locked by an encrypted code that only authorised people can access.
- Upgrade devices if the manufacturer has stopped supporting the software.
- Implementing a security policy such as requiring all devices use a high-quality VPN and antivirus protection.
- Encourage strong password practices – To encourage better cybersecurity practices, enforce strong credentials, multifactor authentication, and encourage users to use a password manger.
- Educating employees about security best practices and how to avoid data breach attacks.
What protections can I put in place if a data breach occurs?
While the methods mentioned above can help protect your small business from a cyber-attack or data breach, sometimes the worst can happen. The next important consideration for small business owners is what protections to put in place if a data breach occurs.
Having data protection insurance in place could help you in a number of ways if a data breach occurs to your small business. A popular type of data protection insurance for small business are Cyber Liability policies. Cyber Liability insurance is designed to protect you and your business against both the legal costs and expenses related to cybercrime.
Your coverage may generally include cover for expenses and restoration costs relating to the following:
- Data breaches including theft or loss of client information
- Network Security Breaches
- Business interruption costs
- Forensic investigation into the cause or scope of a breach
- Data recovery costs
- Cyber Extortion
- Crisis management costs (to protect or mitigate damage to your businesses reputation resulting from a cyber event)
- Loss and Legal costs, including fines and penalties resulting from a third party claim for data or network security breach against your company
The bottom line
Protecting your small business and your clients from the affects of a data breach is essential to staying in business. You’ve worked hard to establish your spot in your industry and you don’t want to expose all that work to opportunistic hackers. While there are many ways to protect your business from a data breach, Cyber Liability insurance is an important addition to any cyber security plan.
