Data breaches: Not “if” but “when”

When we think about data breaches, it’s the big retailers — like Target, famously — and restaurants that do hundreds or thousands of point-of-sale transactions every week that come to mind. But contractors, especially if they’re working with subcontractors, are not immune to this risk — a single incident could cost a company thousands. According to the Identity Theft Resource Center (ITRC), a 10-year average showed that the business sector accounted for 24.6 percent of all breaches — ahead of government, healthcare, and financial industry sectors.

ITRC says that in 2014, breaches involving subcontractors/third parties were up in 2014 and came in at 15.1 percent. Accidental exposure of information is also on the rise: In 2014, cases jumped to 11.5 percent, up from 7.5 percent in 2013.

Even your small business can have significant exposure

A breach incident could cause lasting damage not only to your organization’s reputation, but to your bottom line. If private data is lost, stolen, or compromised, even the smallest company could face substantial legal liability and regulatory expenses.

Your company’s computer probably holds employee addresses; employees’, applicants’, and subcontractors’ Social Security or driver’s license numbers; copies of checks or credit card receipts; W-9 forms for your subcontractors; and employee health-plan records.

That means you’re at risk. Resolving the issue can involve lots of legal fees and requirements. Forty-seven states have breach notification laws, and more and more of them require a report to the state attorney general’s office. Many of the laws also include a ticking clock, so knowing ahead of time what’s required of you will save you some frantic documentation gathering when something does happen.

For more information:

Pardridge Insurance (815-758-4447) and our partner Grinnell Mutual can help you deal with the risk that breaches present. ID Experts offers lots of resources about data breaches, their prevalence, and best practices for dealing with them.