Error Omissions
Error Omissions
Submit your information below so we can contact you with a FREE quote
[All fields are required.]
Actual Annual Revenue:
Verify:
=
I have read and agreed to theTerms & Conditions
Error Omissions
Error Omissions

Cyber Liability: Causes of Data Losses


Cyber Liability: Causes of Data LossesCyber Liability: Causes of Data Losses

A study conducted by NetDiligence®, a cyber risk assessment and data breach services company, on cyber liability and data insurance claims for incidents occurring between 2005 and 2010 within a variety of industries, including the airlines, consulting, education, financial services, retail, manufacturing, information technology, and healthcare sectors, looked at the type of data exposed, what caused the loss, and which business sector suffered the incident.

Type of Data Exposed

According to the study, more than half of the events involved the unauthorized disclosure of PII (Personally Identifiable Information). About 75% of the records exposed contained credit card information. PHI (Personal Health Information) accounted for the second-largest type of data, comprising 21 percent of breach incidents. What’s more, increase regulations such as HITECH (Health Information Technology for Economic and Clinical Health) are driving the next wave of third-party liability lawsuits. Although crisis services associated with PII, PHI and credit card data breaches were significant, much of the costs were due to legal damages awarded.

Cause of Data Loss

The sampling in the study found that the cause of loss varied, however 95% of the breaches were caused by one of three things: hackers, rogue employees, and loss/theft of equipment.

Hackers caused 32% of breach events and were responsible for 75% of all exposed records. Industry experts concur that these incidents can be directly attributed to increased use of malware.

Malicious breaches by rogue employees—due to firings, downsizing, generally poor economic conditions or the relative ease of selling stolen information—are a growing area. The study’s findings show rogue employees to be the second largest cause of breaches, comprising 19 percent of breach events.

Lastly, loss or theft is right at the top of the list. This involves data breach claims as result of lost thumb drives, missing laptops, backup tapes, smartphones, and missing hard copy reports. Lost or stolen equipment made up 15% of data breach incidents in the study’s sampling and accounted for 10% of all personal records exposed. This demonstrates that many of these incidents are not protected by firewalls.

Business Sectors

More than 60% of breaches in the study’s sampling occurred in financial services, healthcare and retail. Eight-eight percent (122 million) of records exposed occurred in financial services alone. Costs across business sectors were fairly spread between crisis services, legal damages and first-party losses. However, the average cost for legal damages in these incidents was significantly higher than the average cost for crisis services. Average expenses per breach for crisis services were about $200,000 per service (forensics, notification, credit monitoring, and legal counsel), while legal damages ranged between $450,000 and $1,000,00.

At Axis Insurance Services, LLC, our cyber security insurance specialists can work with you to reduce your upfront exposure, develop effective new processes and procedures to minimize your risks, and help protect you against financial loss. Give us a call at: (877) 787-5258.

Comments

comments

Blogged on: August 16, 2012 by Mike Smith
Error Omissions
Error Omissions
Submit your information below so we can contact you with a FREE quote
[All fields are required.]
Actual Annual Revenue:
Verify:
=
I have read and agreed to theTerms & Conditions
Error Omissions
Error Omissions