data loss insurance

How Can You Lose Data?

While reliance on stored electronic data has been increasing exponentially, the prevalence of selecting data loss insurance to mitigate financial and reputational risk has grown as well. Trends in how data is stored has also changed during this time, moving away from PCs and laptops towards greater use of handheld devices such as tablets and smartphones. Smaller organizations may be particularly vulnerable, as they may have less time and money to use on data backup and information security technology.

Data Loss Incidents

Many large data loss incidents result from criminal or malicious attacks on corporate or government computer networks where non-public personal information is stored or transmitted. Because this type of loss may require notification of the affected parties, these are often reported in the news. Other losses that may solely impact the data owners can include hardware or software failures. When data is lost due to malfunctioning devices, common reasons include:

  • Human error
  • Software corruption
  • Computer virus
  • Natural disaster
  • Hardware damage

Data Loss Outcomes

Once data is lost, there are several outcomes that may occur. The data may be retrievable from backups or other sources, or it may be lost permanently to the owner. And worst-case scenario, the data may be in the hands of criminals, putting customers’ and employees’ identities at risk. In all cases, industry-specific data loss insurance can help mitigate the costs of remediating the damage.