CHICAGO, Feb. 20, 2014 /PRNewswire/ -- TechInsurance, the nation's leading provider of insurance for small IT businesses, freelancers, and independent contractors, today released new Errors & Omissions Insurance recommendations for technology firms that serve retail clients based on numbers published earlier this week by SafeNet, a company that provides security solutions for data assets.
According to SafeNet's 2013 Data Breach Highlights report, last year's breaches affected different industries with varying levels of intensity. Retail businesses suffered the highest volume of damage from breaches, with an average of 6.6 million records compromised in each breach. Given that The Ponemon Institute reported in 2013 that the average cost of a breached record is $188, the cost of breaches for retail firms could be significant.
To help recover those costs, many retailers sue companies they've contracted with in the past that might have liability for failing to prevent the breach.
"Many technology companies don't realize that they could be held partly liable for data breaches that happen to their clients," said Ted Devine, CEO of TechInsurance. "But when a company is looking to recover costs after a major exposure, tech contractors are often the first to be named in lawsuits."
The good news, Devine added, is that most Errors and Omissions Insurance policies sold to small technology companies (including freelancers) include third-party cyber liability protection – the kind needed when a firm is named in a lawsuit over a client's data breach.
In light of the new numbers published by SafeNet, TechInsurance has issued recommendations for technology contractors and business owners who serve the industries highlighted in the report. Specifically, those guidelines suggest that professionals who serve retail clients contact their insurance agent to verify that their Errors & Omissions Insurance policy limit is adequate to handle a large-scale client data breach.
Read the complete guidelines for preparing a business for data breaches at TechInsurance's blog: http://www.techinsurance.com/blog/cyber-liability/retail-security-recommendations/.
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