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. Therefore, tax preparers should take extra precautions to safeguard their records and clients’ information since most 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 case of a data breach where your customer’s data leaks. This personal data could include social security numbers, credit and debit cards, health information, and driver’s license numbers.
Cyber insurance is essential for preparers in 2023 due to a large percentage of the workforce working from home. At home, preparers might not have the same security measures as at the office.
It’s important to protect your business with cyber insurance and cybersecurity software. Without these safety guards, you may be putting your business information at risk to hackers.
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 attacks 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 malwares, including spyware, ransomware, and viruses. You can accidentally install malware by clicking on a broken link.
This attack happens when hackers insert themselves into a transaction between you and a third party. For example, if you get on public Wi-Fi, the hacker can access your device through the network if it is not secure.
All these attacks expose different vulnerabilities your business may have. Unfortunately, it is hard to protect against them, but it is essential to try. Cyber insurance will help protect your business if you do experience a breach.
Read more about how to handle a tax data breach if you experience any of these attacks.
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 W-2s and 1099s
- Process payment
- Transmit data electronically
Make sure you are prepared in the event of a hack. Cyber insurance will help you to:
- Recoup revenue lost during the breach
- Recover stolen information
- Restore business operations