Cybersecurity – Think about it before you sign a contract!

Cybersecurity has been a serious business concern for several years now.  It doesn’t seem to be getting any better despite a wide range of efforts to combat the bad guys. In fact, according to the Ponemon Institute’s 2017 Cost of Data Breach Study, the average cost to a U.S. business that suffers a breach now exceeds $7,000,000.00!

 

Small companies who do business with big companies often find themselves facing very one-sided contracts.  These contracts make the small company liable for everything that could go wrong, even for things beyond the small company’s control. Increasingly, this includes the risk of a data security breach.

 

That makes it imperative for the small company to do these things:

 

    1. 1. Have your data security systems evaluated before you pursue business with large companies.  Correct any flaws that turn up during the evaluation.

 

  1. 2. Make a strategic decision to pursue only the kinds of business that your data systems are capable of handling.

 

  1. 3. Bring in the business.

 

  1. 4. Before signing any contracts, be sure to understand all of the risks that are being shifted your way.

 

  1. 5. Identify the risks that could sink your company if something goes wrong and you have to pay for it.

 

  1. 6. Help the big company see it is in their interest to ensure your company survives and delivers the product or service that the big company wanted from you in the first place! Point out any risks that really should be borne by the big company, not by you.

 

  1. 7. When you do sign a contract, take steps to prevent data breaches.

 

For example, if the contract makes you responsible for loss of the big company’s customer data (example: Target’s vendors), minimize the risk by strictly limiting the amount of customer data that come your way. Also minimize the number of people in your company who have access to the data, and instruct them well in the best ways to protect the data.

 

Let us know if you would like an introduction to cybersecurity professionals who can do the assessment and remediation.

 

We can also connect you with business risk & insurance professionals who can help you obtain the right kinds of cybersecurity insurance!

 

Give us a call!  We’d love to help you.

 

Stuart Blake

Mobile – (949) 842-9379

sblake@innovacounsel.com

Michael Oswald

Mobile – 208.914.3086

moswald@innovacounsel.com

 

www.innovacounsel.com

 

© 2017 InnovaCounsel

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