Is Your Confidential Data Fully Protected

These days, cyber-security is becoming a higher priority in the business world. Most are now aware of the numerous large and reputable organizations, such as Target, Home Depot, eBay, the Federal Government, and many others that have had their data compromised in recent years. But while corporate America spends billions beefing up its “front door” security, many companies are paying far less attention to the critical data that may be escaping out the “back door.”

With rapid technological advancements, especially in computer hardware and similar equipment, businesses are upgrading their electronic equipment more often than ever before. The problem is what happens to the old equipment once it gets replaced. The old computers, phone systems, copiers, printers, cell phones and other electronic devices often sit around for months (sometimes years) in unsecured basements, hallways and storage rooms waiting to be scrubbed.

For often overworked company IT people, wiping off the data from old systems is not a high priority; it’s tedious and time-consuming, and it takes away from more “important” tasks, such as getting the new systems up and running and making sure they stay functional despite employee users who are often careless and reckless in their use of these systems. This leaves the data scrubbing of the old systems down around 99 out of 100 on the priority list.

While these systems are sitting around, it is not all that difficult for someone with nefarious motives to get a hold of the confidential data left on them. In fact, in some cases, companies do not even go through the critical step of wiping their systems clean of old data; instead, they either put the equipment up for sale or donate it to a local non-profit. In such cases, critical company data (and just as importantly, critical company customer data) can end up in the hands of the highest bidder.

Insuring for Liability Exposure: For organizations of all sizes, it is critical that safeguards are put in place to properly dispose of company and customer data. In some industries, failure to implement such safeguards can open the door to fines and even prison time. But even if you take all the necessary steps, circumstances beyond your control can still cause your data to be compromised. Because of this threat, any organization that does anything electronically should be properly insured.

Cyber liability insurance is a relatively new product that offers protection for businesses should they experience a data breach. Because a general business liability policy will not typically cover the worst-case “cyber” scenarios, this is a policy every organization should consider. Specific coverage details may vary depending on the insurer, so to find the right policy for your business, it is best to speak with an independent insurance broker with access to several top insurers in your area, and the ability to shop for the coverage that best fits your needs and budget.