By now, you have certainly heard about the data breach at Equifax. With 143 million people affected, the chances are that your personal information has been compromised. You can confirm this by going to their website and searching for the link that confirms whether your personal information has been affected.
This incident raises a lot of questions, not least that of corporate conduct. For a company with such critical importance to our economic infrastructure – after all, many credit decisions are based on their information – it is surprising how badly they have handled this crisis. First, it took over a month to make the announcement. They tried to charge customers to place a freeze on their credit. To add insult to injury, some executives sold some of their shares (to be fair, it is claimed that they had no knowledge of the breach). In any case, very poor corporate conduct.
What it comes down to is a question of risk. All businesses face some level of risk, and need to plan accordingly. In today’s business environment, we all need to be cognizant of the risk posed by data breaches and insecurity. Accounts are hacked, which can lead to monetary and reputational loss. Email accounts are frequently hacked.
The Equifax data breach will no doubt have an impact on people in the form of identity theft. As you know, those of you who are organized as sole proprietorships or Sub-S Corporations (and perhaps LLC’s and PC’s as well) depend on your personal credit health for your businesses. Your credit health and score are key factors in your access to and cost of finance.
Every business needs to understand the inherent risks – personnel losses, product liability, vehicular accidents, loss of a lease, workplace accidents – and plan for them. We all need to have a plan for the unexpected disaster.
When a business reaches a critical size, it should engage a broker and consider an all risks policy. In addition, agents are specialists in risk assessment. It may be time for a consultation.