Insureon Blog

One More Way Customers Can Sue You

17. October 2014 08:03

gavel on a keyboard

It's a sad wakeup call for small businesses: according to the online news site Cincinnati.com, a federal court in Northern California gave the go-ahead for victims of the Adobe System, Inc. data breach to proceed with a class-action lawsuit against the company. The dismal twist? None of the victims have suffered any injuries.

That's right — the court ruled that so long as there's sufficient threat of future identity thefts, a lawsuit can proceed. In the past, parties affected by a data breach had to actually sustain injuries before they could seek damages. However, the CA judge found that the actual hacking — which resulted in stolen names, Adobe IDs, passwords, credit card numbers, expiration dates, mailing addresses, and email addresses of 38 million Adobe users — qualified as harm.

While this might be good news for the victims, for small-business owners, it reinforces just how big an issue data security is right now. Let's review what you can do to keep your company's data under lock and key.

How to Build a Fortress: Best Practices for Data Security

A lax approach to your data security is one of the quickest ways to end up with a nasty breach on your hands. And you don't want that. A data breach can cost hundreds of thousands of dollars in notification costs, credit-monitoring fees, and legal bills if you end up in court. Plus, only an oil spill and shoddy customer service are more reputation damaging for a business than a data breach, according to Experian's research.

Then there's the fact that small businesses are often the targets of cyber crimes because their information is simply easier to get to. According to security experts, 70 percent of breaches involve small businesses, and the recovery costs average a cool $300,000. (You can read more about that here: "'No Business Too Small' to Be Hacked, Says Security Expert.")

Now that you know the stakes, let's recap some ways you can limit your risk of hacks and data breaches:

To learn more about data security, check out our blog series about data breaches.

know your business risks

Tags:

Cyber Risk Insurance | Data Breach | Lawyers | Risk Management | Small Business | Small Business Risk Management | Tips for All Small Businesses

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