Cyber Liability And The Risks In Collecting And Storing Customer Data for Businesses

Cyber liability is a constant risk for companies collecting and storing customer data. These activities have become a regular aspect of business in the digital age. Ultimately, Applied Behavior Analysis (ABA) companies endure this as well, as the threat of a cyberattack is always present.  But there are ways to prevent this. First, you must understand what cyber liability is and how it affects ABA companies like yours. 

What Cyber Liability Does

Cyber liability is the legal and financial risks associated with data breaches and cyber-attacks. It typically includes the costs of investigation, notification, and potential lawsuits. As the amount and sensitivity of customer data collected by businesses continue to increase, companies need to understand the risks involved and take steps to mitigate them.

The Growing Risk of Cyber Threats and Data Breaches

Many businesses collect and store customer data to gain insights into their customer’s needs and preferences. But the more data businesses collect, the more susceptible they become to cyber threats and data breaches. It has led to a growing concern over cyber liability.

One of the significant risks businesses face when collecting and storing customer data is the threat of data breaches. It has become especially prevalent with more and more employees using company laptops and tablets to take notes and conduct other official functions.

Further Cyber Liability Threats

Many companies also have possession of their customers’ personal identifiable information. Cybercriminals often target businesses that collect sensitive information such as credit card numbers, addresses, and social security numbers. They can use this information to commit fraud, identity theft or sell it on the dark web.

In addition to data breaches, businesses risk accidental data loss or damage. It can occur due to system failures, human error, or natural disasters, leading to the loss of critical customer data. The loss of customer data can damage the business’s reputation and lead to legal and financial consequences.

Another risk that businesses face when collecting and storing customer data is non-compliance with data privacy laws. Businesses that collect customer data must comply with various laws and regulations that dictate how they collect, store, and use this information. Non-compliance with these laws could constitute a HIPAA violation and lead to legal and financial consequences.

Mitigating Risks  

What can data collection and storage businesses do to safeguard against cyber liability? There are many ways to do so, including:

Implementing strong cybersecurity measures: Businesses should implement strong cybersecurity measures. These include firewalls, intrusion detection and prevention systems, anti-malware software, and encryption tools.

Training employees on data handling best practices: Employees should have training on data handling best practices. They should learn to identify and report suspicious activity and properly handle and store sensitive data. 

Developing strong data privacy policies: Businesses should develop strong data privacy policies that outline how to collect data. Likewise, they should review the policies and deliver periodic updates to ensure compliance with changing laws and regulations.

Regular testing and updating security measures: Businesses should regularly test and update their cybersecurity measures to ensure they are effective against new and emerging threats.

Limiting access to sensitive data: Businesses should limit access to sensitive data to only those employees who need it to perform their job functions. It can help prevent accidental data loss or damage and unauthorized access.

Conducting regular risk assessments: Businesses should conduct regular risk assessments to identify potential vulnerabilities and weaknesses in their cybersecurity measures and data privacy policies.

Purchasing Cyber Liability Insurance

Another way businesses can protect themselves from cyber liability is by purchasing cyber liability insurance. This type of insurance provides financial protection during a cyber-attack or data breach.

Cyber liability insurance covers the costs associated with a breach, including investigation, notification, and legal fees. It may also cover damages from third-party lawsuits and assist with public relations and reputation management.

Furthermore, cyber liability coverage helps ensure compliance with legal and regulatory requirements related to data privacy. Many states and countries have enacted laws that require businesses to notify customers in the event of a data breach. Cyber liability insurance can cover these costs and ensure businesses comply with data privacy laws.

About Olson Duncan Insurance

At Olson Duncan Insurance, we look to provide clients with a total solution, not simply a quote of an insurance contract. Our goal is to provide real value and build a long-term relationship based on trust. This is understood by the fact that we provide our applied behavioral analysis clients with industry-specific insurance and risk management services, including BCBA liability insurance, workers’ compensation, group health benefits, and anything necessary to protect your valuable work. We would love to get to know you and answer any questions. To find out more about how we can help you, or if you would like a quote, please call Daniel and our team at (310) 373-6441.