Harford, CT—In the “and you-thought-showrooming-was-a-menace-to-retail department,” there’s another tech-related, rising concern for retailers: cybercrime.
Small businesses may not think they are at risk for cybercrime, but almost 72% of the 855 data breaches worldwide analyzed by Verizon’s forensic analysis unit were at companies with 100 employees or less.
According to eMarketer Inc., a research firm, total e-commerce sales are estimated to be $224.2 billion, up 15% from $194.7 billion in 2011. That figure will only rise this year as
more and more consumers turn to their laptops, tablets and smartphones to do their shopping.
And cybercrime is rising with these sales. This is a particularly daunting issue for retailers who may be unaware of the serious risk exposures they face, according to Travelers Companies.
Cybercrime comes in different packages, but it often involves data breaches of personal confidential information (such as credit card or Social Security numbers) that are hacked and used for criminal purposes.
Most Small Retailers Lack Sufficient Insurance Coverage
For retailers, this confidential information can be stolen from a customer, employee and the business itself. There’s also accidental loss or sharing of personally-identifiable information regardless of whether that information was from electronic data or paper physical records.
While the cost of a data breach can vary, stolen data records can cost a company between $59 and $194 per person impacted, according to the Ponemon Institute. Plus, most retailers have no insurance coverage for cyber risks, creating even greater potential for loss.
In fact, Travelers found that only 29% of small business owners surveyed were very confident that they had adequate coverage to protect their business against cyber liability
To help small businesses, Travelers put together a new CyberFirst Essentials-Small Business insurance coverage.
“This new coverage targeted exclusively to small businesses extends Travelers’ cyber insurance expertise to a critical driver of the economy. Small businesses may have exposures to sensitive information that can be compromised,” said Marc Schmittlein, executive vice president, small commercial at Travelers. www.travelers.com.