The tax preparation industry involves a lot of personally identifiable information (PII). This data can help hackers to identify a person and steal their identity. Tax preparers should take extra precautions to safeguard their records and their clients’ information since a lot of the data used to fill out a tax return is PII. One way you can protect your business is through cyber insurance.
What is cyber insurance?
Cyber insurance protects businesses of all kinds from internet and digital-related attacks. It is usually separate from a general liability policy. This type of coverage will protect against any liability in the event of a data breach where your customer’s data is leaked. This personal data that could be at risk include social security numbers, credit and debit cards, health information, and driver’s license numbers.
Cyber insurance is important for preparers to consider in 2020 due to the large percent of the workforce who is working from home. At home, preparers might not have the same security measures in place as they do at the office. It’s important to implement these measures, and it is equally important to protect your business with cyber insurance.
What types of cyber risks might my business be vulnerable to?
There are several types of cyber-attacks to be aware of today. Some of the most common include:
Phishing is when an attacker sends fraudulent communications that appear to be real. The most common source is email. They will usually ask for credit card data or a password and username. This attack has become more prevalent in recent years.
Malware is malicious software that is downloaded onto your computer. There are several types of malware, including spyware, ransomware, and viruses. You can accidentally install malware by clicking on a broken link.
This type of attack happens when hackers insert themselves into a transaction between you and a third party. For example, if you get on a public Wi-Fi, the hacker can access your device through the network if it is not secure.
All of these attacks expose different vulnerabilities your business may have. It is hard to protect against all of them, but it is essential to try. Cyber insurance will help protect your business if you do experience a breach.
Why does my tax business need cyber insurance?
Your business is important to you. Sometimes one data breach can cause you to lose your business entirely. You may consider cyber insurance if you:
- Gather customer data, like social security numbers and driver’s license numbers
- Manage financial information, including W2s and 1099s
- Process payment
- Transmit data electronically
Make sure you are covered in the event of a hack. Cyber insurance will help you to:
- Recoup revenue lost during the breach
- Recover stolen data & information
- Restore business operations