Ride the Lightning

Small Businesses Have Big Data Breach Problems

March 11, 2013

A recently released report issued by the Ponemon Institute reveals that 55 percent of U.S. small businesses have experienced at least one data breach, but only a third notified individuals that their personal information had been exposed. The companies which participated had annual revenues of less than $10 million.

The survey indicated that 53 percent had multiple breaches. That last statistic should raise eyebrows. And since 46 states have data breach notification laws, it is disturbing that a third of the respondents did not notify the people affected by the breach.

The primary causes of the data breaches were employee or contractor mistakes; lost or stolen laptops, smartphones, storage media; and procedural mistakes.

70 percent of the respondents believed that sensitive data is more likely to be breached when the data is outsourced – but 62 percent do not have contracts in place requiring third parties to cover the costs associated with a breach. It is troubling that 85% share customer and employee records with third parties such as those which provide billing, payroll, employee benefits, web hosting and information technology services but obviously are not taking adequate data security precautions.

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