It's not unusual for businesses to venture outside of their organization for help. In fact, many companies rely on third parties and partners to help them deliver the best service to their clients and customers. However, there are hidden risks lurking in these partnerships.
According to Insurance Journal, 30 percent of data leaks are caused by employee error or breaches while controlled by a third party. This should ring as a wake-up call, loud and clear, to any business working with external agencies and third-party partners.
Below, CyberPolicy will examine the risks associated with third-party data breach, the industries most likely to be affected and how to select a cybersecurity policy capable of mitigating these liabilities.
Getting by with a little help from your friends
Take a moment to think about the third-party companies you currently employ and the services they provide you. Do you work with a lead-generation company that fills your pipeline with fresh prospects? Do you collaborate with an external human resources team that handles your payroll, or a social media marketing firm that manages your Facebook and Twitter pages?
What kind of information do these companies store? If it is data relevant to your customers, patients or clients, a data breach could harm your reputation. After all, who wants to do business with a company that leaks personal information or financial data?
In fact, Target saw a noticeable drop in revenue after cyber thieves stole data on 70 million customers and 40 million credit/debit cards in 2013. Surprisingly, the point of entry was a compromised HVAC (heating, ventilation and air conditioning) vendor.
We already know hackers leverage stolen information for identity theft and dark web sales, but it's not just consumer data at risk. Digital assets and proprietary company data can be leaked as well.
Take HBO for instance. The premium cable company has suffered a glut of data breaches as of late, including leaked scripts, episodes and actors' personal information. While much of this was the work of hackers, a few episodes were prematurely posted by third-party partners in Spanish and Nordic territories. This fluke was discovered by on-demand subscribers who then posted footage on Reddit, YouTube, Instagram, Twitch and other streaming sites. Before HBO could take down the links, the HD episodes were spread across the internet.
In the end, it doesn't matter if you're operating an entertainment company, accounting firm, hospital, retail chain or even a fledgling startup; third-party data breaches can endanger your standing and well-being.
Cybersecurity policy: preparing for the worst
Just because third-party data breaches are prevalent doesn't mean they are inevitable. There are steps you can take to defend your business against financial losses, even when the problem is outside of your control.
For example, a third-party cybersecurity insurance policy cover policyholders from losses due to external data breaches which could include legal fees, settlements, media liability, privacy and credit monitoring for customers and clients. This is perhaps the best safeguard for organizations worried about partner data breaches.
Curious to find a cyber insurance provider fit to your company's need? Visit CyberPolicy today for more information.
