Cyber Security Critical To Successful Cannabis Business

In this age of technology most businesses have some form of a computer system with laptops, tablets, and servers. The Cannabis industry, like traditional businesses, collect data to determine how to serve their customers better. In some instances businesses collect data to ensure their employees have quality working experiences. If that data is valuable to you as a cannabis business owner, it is also valuable to those who may not have such positive intentions. Cyber security is a field that is growing every day as technological advances are made. With more and more businesses storing data electronically, including the cannabis industry, cyber security is just as important for cannabis business owners.

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Companies as big as Macy’s, Bloomingdale’s, and Reddit have all had their cyber security breached. There are countless other small businesses across the world that are not reported in the media but that have fallen victim to this type of crime. Data breaches can result in the loss of millions, even billions, of private records and sensitive data, affecting not only the company that was hacked, but also the individuals whose personal information may have been comprised. There are multiple types of cyber security attacks and all of them yield similar but different results.

When businesses are attacked, information such as names, addresses, and email addresses are stolen along with payment information. Its not hard to see why consumers and businesses alike would be disturbed by a cyber security failure. Payment and personal information is not the only concern as medical records are also under attack. Health insurers, federal departments of health, and hospitals have all been attacked by hackers searching for information. The United States takes private medical information very seriously and exposure of this type of information violates the public trust.

s2s insurance, eric rahn, marijuana data breach, marijuana business, dispensary insuranceAt least 16 separate security breaches occurred at retailers from January 2017 until now. Many of them were caused by flaws in payment systems, either online or in stores.

Data breaches are on the rise for both retailers and other businesses.

A recent report published by cybersecurity firm Shape Security showed that 80% to 90% of the people that log in to a retailer’s e-commerce site are hackers using stolen data. This is the highest percentage of any sector.

These data breaches are a real danger for both companies and customers and can affect the trust shoppers have in brands.

According to a study by KPMG, 19% of consumers would completely stop shopping at a retailer after a breach, and 33% would take a break from shopping there for an extended period.

If your company stores private information on a computer or a server, your company is legally liable for the protection of this personal information. Cyber Security or data breach insurance protects business owners from legal liability resulting from this type of breach, whether the data is leaked electronically or by some other means such as a paper file. S2S Insurance specialists Eric Rahn strongly urges all cannabis businesses to have a strong cyber security network and to invest in data breach insurance. The rate of cyber attacks on businesses is rising each year and as a businesses owner you don’t want to find out your firewall was not enough and you don’t have the right coverage to cover the losses.


Data Breach Issues Create Problems For Cannabis Business Owners

As a cannabis business owner you may ask yourself why data security is important and what’s the real risk? The reason data security is so important is directly tied to the risk of associated with a data breach, which is money. A data breach for even a cannabis company can have costly financial consequences. Data security is all about financial loss. Data is an asset that must be protected. Loss of clients/customers private information can lead to fines, lost sales, judgement, damages or more. Often the financial impact is not always immediately known depending on how soon the breach is discovered if it wasn’t prevented. s2s insurance, data breach, hacking, testing lab insurance, cannabis insurance, cannabis doctor insurance

For cannabis related businesses a data breach could have an even greater impact if a the business is considered a health care provider. If you are a cannabis dispensary or testing lab in a state where marijuana is only legal for medicinal use, those businesses may be under greater scrutiny and subject to greater regulations when it comes to a data breach. These business will have personal information such as home addresses and phone numbers, but also medical information. Patients’ medical history could be used to blackmail them if they don’t want their medical history publicized, making the information specifically valuable. Specific provisions of the HIPAA Act protect health care information from fraud and abuse, and when violated carry heavy penalties.

Providers continue to struggle with cyber-security, and phishing expeditions are a frequent culprit. They can result in a painful hit to a company’s bottom line and negative publicity exacerbated by lawsuits. Healthcare organizations spend more than $400 per record lost or stolen after a data breach, the highest of any industry reviewed in a recent analysis by IBM Security.

A study by Accenture and the American Medical Association found four out of five doctors have experienced a cybersecurity attack. The majority involved phishing, followed by computer viruses.

In a Mimecast and HIMSS Analytics survey, providers ranked email the No. 1 source of potential data breaches. More than 90% of respondents said email was critical to their organization, and eight in 10 said they use it to send personal health information, typically to other providers. s2s insurance, data breach, cannabis insurance, marijuana recommendations, dispensary insurance

Financial loss and regulatory concerns are key factors to protect against a data breach, there is also the issue of loss productivity. Employees will in most instances be required to deal with customer issues and concerns once the breach is made public. Data loss can also result in certain programs and applications not working properly or not working at all. Certain security features may be disabled and require specialists to update and re-secure the network. The reality is even the best data security systems are vulnerable. While it is very important to have a strong data security system in place, S2S Insurance strongly suggests maintaining a data breach insurance policy to mitigate the risk. Data breach insurance protects business owners from legal liability resulting from this type of breach, whether the information is leaked electronically or by some other means such as a paper file. It is important to remember that policy limits do apply and to review your policy with a trained S2S Insurance agent and an attorney. Do not let hackers cost you hundreds of dollars per file due to not being prepared. Have a strong data security system in place and have the peace of mind with a data breach insurance policy.


How A Data Breach Can Impact Your Cannabis Business

When we hear the term “data breach” we are trained to immediately check our online presence information to determine if we’ve been hacked. We hear the term frequently in the news about a massive data breach and we are reminded of our vulnerability in this new age of technology. A data breach typically involves an unauthorized or illegal viewing, access to, or copying of data by an individual or group. The purpose is to steal as much useful information as possible or publish that information in a public forum.

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A data breach can pose a major threat to a cannabis business

LabCorp is a one the largest medical diagnostic companies in the nation with the resources to have maximum data protection, yet they still may have been exposed. The danger with a company such as LabCorp experiencing a data breach is that their customers and patients’ medical information may have been exposed. Besides medical information it is possible that payment information and internal financial information about LabCorp itself has been seen, accessed and or stolen. LabCorp will have to deal with the exposure of patients private health information but also the reality that they could be vulnerable to further attacks aimed at stealing money or access to credit.

LabCorp, one of the nation’s largest medical diagnostics companies, is investigating a security breach that could have put health records of millions of patients at risk. The company, in a filing with the Securities and Exchange Commission, says it detected “suspicious activities” on its network over the weekend of July 14 and “immediately took certain systems offline as part of its comprehensive response to contain the activity.”

“This temporarily affected test processing and customer access to test results on or over the weekend,” the company said. “Work has been ongoing to restore full system functionality as quickly as possible, testing operations have substantially resumed today, and we anticipate that additional systems and functions will be restored through the next several days. Some customers of LabCorp Diagnostics may experience brief delays in receiving results as we complete that process.”

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Some reading this may wonder how this pertains to the cannabis business, but this has everything to do with the cannabis industry. The cannabis industry is unique in the fact that it exists in both the medical world and the retail world. Some states have legalized marijuana for medicinal use only, others for recreation. Some cannabis businesses may have some form of medical information for patients if they are a medical marijuana provider. Other businesses may have less critical data but it is still dangerous in the wrong hands, such as names, addresses, phone numbers, and emails of customers which if published could put any number of people at risk if that information is exposed.

There is also the very real threat of identity theft and people stealing identities to gain access to medical marijuana. If your company stores this type of information on a computer or server, your company is legally liable for protecting this information from a data breach. Data breach insurance protects business owners from legal liability resulting from a data breach, whether the information is stored electronically or by some other means such as on paper.  As always it is important to remember that regardless of what type of insurance policy you have, coverage limits will apply. You must read your policy with both your agent and your attorney to determine what your coverage consists of.