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The growth of these forms of attacks against businesses and consumers is astonishing. Even more astonishing are who these attacks are honing in on. Most of us would assume the attackers go after the bigger fish, but recent data is painting a much different picture. April 24, 2013, Taylor Provost reported on CFO in an article titled, Should You Consider Cyber-Liability Insurance? :

"Telecommunications giant Verizon on Tuesday released its annual investigative report of data breaches, which found that small businesses are the number-one target of cyber-espionage attackers.

Almost half of the 621 confirmed data-breach incidents Verizon recorded in 2012 occurred at companies with fewer than 1,000 employees, including 193 incidents at those with fewer than 100 workers. Similarly, security company Symantec reported last week that cyber attacks on businesses with fewer than 250 employees leaped 31 percent in 2012, following an 18 percent climb in 2011. Both reports cited small businesses' inadequate security infrastructure for protecting financial information, customer data and intellectual property.

As cyber threats become more pervasive, small businesses – particularly those in the high-technology, financial-services and health-care industries ­– are taking out insurance policies designed to bolster their protection from the potentially crippling costs that can accompany data breaches and other cyber attacks." (Obviously with recent headlines there is a certain irony to a report of security breaches from Verizon, but that is for a wholly different discussion).

Small businesses are the targets more so than big business. The reason is that small businesses are more vulnerable with less resources to protect themselves against cyber attacks. The costs are phenomenal and have the potential to spell a quick end to an otherwise flourishing company or business owner. Matt Dunning recently reported on the 2013 NetDiligence Cyber Risk and Privacy Liability Conference, happening this weekend,  Midsize firms facing more data breach litigation: NetDiligence panel :

"The cost of a data breach, including investigations and lawsuits, can devastating to midmarket businesses, even if the actual dollars spent mitigating the breach's effects pale in comparison with costs incurred by larger firms.

In its most recent analysis of costs associated with cyber crime, the Traverse City, Mich.-based Ponemon Institute estimated that surveyed companies with fewer than 5,000 employees incurred an average $2.8 million per data breach in 2012, compared with $18.7 million by companies with more than 15,000 employees.

However, the Ponemon Institute's study also revealed that the average midsize firm's breach-related per capita costs were more than four times those paid by a large firm."

The most obvious question is "What can be done to protect against data breach litigation" or cyber attacks in general? In an article posted on Forbes titled, 5 Ways Small Businesses Can Protect Against Cybercrime, written by Tim Devaney and Tom Stein, the five ways to protect against cyber crime are:

1. Shore up weak points.
Passwords and Firewalls

2. Designate a banking-only computer.
Used solely for banking purposes
3. Back it up.
Always have a copy

4. Educate employees.
Team Effort

5. Get insured.
"No matter how hard you try, you’ll never be completely safe from cybercrime. So you need a last line of defense. One of the best is an insurance policy that covers any losses from cybercrime and computer fraud. Many policies are affordable, considering what’s at stake. Some cost just a few hundred dollars a year."

Posted 3:41 PM

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