Employee or contractor mistakes, lost or stolen laptops, smart phones and storage media, and procedural mistakes are the primary causes of small business data breaches, according to research commissioned by data compromise insurer The Hartford Steam Boiler Inspection and Insurance Co., a member of Munich Re’s Risk Solutions family.
Independent research firm Ponemon Institute surveyed small businesses with annual revenues of less than $10 million and found that 55 percent of those responding have had a data breach, almost all involving electronic records, and 53 percent had multiple breaches. And, 70 percent of small business owners said they would purchase insurance to help pay for the costs if data is breached.
Hartford Steam Boiler says that 70 percent of the respondents believe sensitive information is more likely to be compromised when the data has been outsourced, but 62 percent do not have contracts that require third parties to cover all the costs associated with a data breach. At least 85 percent share customer and employee records with third parties such as those providing billing, payroll, employee benefits, Web hosting and IT services.
When asked which type of lost or stolen data was more likely to harm their business, 70 percent agreed the loss of personally identifying information was more damaging than confidential company data.