Hardly a week goes by without news of a data breach. From large companies to small mom-and-pop businesses, if you use or store digital data, you are probably at risk for a breach.
Cyber liability insurance can help protect your business in the event of a data breach.
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What is cyber liability insurance?
Cyber liability insurance protects businesses from the financial impacts of a data breach. There are many costs that can be associated with a breach, ranging from legal requirements that you notify all customers to rebuilding or recovering data lost in the event. Reputational damage, crisis communications, and the potential for legal expenses are also risks associated with cyberattacks.
Cyber liability insurance is designed to help you recover from the devastating financial impacts of a data breach. In addition to helping with expenses associated with notifying customers, repairing data, legal fees and reputational impacts, most cyber liability insurance policies will also cover business interruption, which can help you to pay bills if you are unable to be open to the public.
How restaurants are vulnerable to data breaches
Restaurants can be particularly vulnerable to cyber breaches and the aftereffects.
Anyone who has worked in food service knows that the margins can be extremely tight. This has long been the case, and with food and labor costs rising, it’s even more of a factor now.
When funds are tight, sometimes that means putting off upgrading point-of-sale systems to more digitally secure options. Upgrades can be expensive. For something so integral to how a business operates, it can be very easy to mentally justify put off spending the extra dollars.
Not only are software and hardware upgrades potentially expensive, to stay competitive more and more restaurants are connecting to a wide range of digital ordering and delivery platforms—which may increase your exposure to hackers.
Storing any sensitive information like credit card numbers, phone numbers, or customer email addresses and any personally identifying information (such as physical addresses) means there’s a risk.
Cyber risks are growing
The number of different ways data can be stolen and weaponized is astonishing. While most data breaches are the stealing and public release of financial data, there are other ways your restaurant can become a victim of cyber-intrusion.
Data breaches are one of the most common forms of cybercrime. In this situation, a criminal hacks into your systems and then posts all of your customer data publicly online. This puts your customers at risk for identity theft and unauthorized charges, and it leaves you with the PR disaster of violated trust and the financial ramifications of having your customers’ information revealed online.
Spear phishing is a form of credential-stealing that could put your systems at risk. A spear phishing scheme is characterized by a thief contacting a restaurant employee, pretending to be a trusted party such as a vendor or someone in authority like the CEO. They then ask your employee to provide some piece of data or information they need to access your computer systems or bank account.
Ransomware attacks can be particularly frightening. One wrong click on a link and suddenly you and everyone else at your business is locked out of all of your electronic systems—everything from point of sale to your website, to phones and customer accounts. You then learn that the only way you can get your access back is to pay these thieves a ransom. This is extortion, and it is increasingly common.
Recovering from the effects of a breach can be costly
When a data breach or other cyberattack occurs, you may have to stop operating for a period of time. Computer experts will assess how bad the data breach was, while your electronic systems are cleaned up to remove any malware.
If customer or employee data was leaked, you could face damaging liability lawsuits.
How can restaurants protect themselves?
There are a number of steps restaurants can take to reduce the risk of facing costly liability lawsuits.
Employee training – Train your employees in basic cyber security protocols. They are your front line in protecting most types of stored data. If they recognize the signs of a spear phishing attempt or a potentially malicious link, it could save your restaurant from a costly data breach.
Update systems – This is hard but essential. All of your software systems, from your ordering platform to reservations system to your website or accounting software needs to be updated regularly. Cyber threats evolve quickly, and one of the prime ways to stay protected is to have the latest versions installed. Waiting to upgrade because it’s a pain to wait for a software install or because there’s a fee associated with the new version could end up leaving your systems unprotected against a cyberattack. Don’t make your restaurant an easy target for criminals.
Have the right insurance in place – Even if you do everything right, you could still become a victim of a cyberattack. That’s why it is so important to have insurance coverage that can help you recover.
If you want to learn more about cyber liability insurance for your restaurant or café, contact the experts at Rate Insurance. They can help you find the right cyber liability insurance policy at the right price for your business. No matter how large or small your restaurant business is, if you use technology for sales, tracking orders, or managing your bookkeeping, there is a cyber risk. Making sure you have coverage can help with peace of mind when it comes to recovering from a cyberattack or accidental data breach. With many options for commercial policies, Rate Insurance can match you with the coverage that best fits your business.
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