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What most businesses fail to realize is that a single data breach (either from being hacker or from a careless employee) can close a business forever, because liability insurance does not cover professional negligence. Simply put - without the ability to demonstrate documented steps were taken to ensure due care and due diligence were applied to your business operations, you may be considered negligent in a lawsuit. This means you will be solely responsible for the financial damages from lawsuits, fines, and notification expenses from any data breaches. Insurance companies are in the business to make money from getting paid premiums and do not want to pay out unless they have to. Insurers will find loopholes not to pay for claims and when you are non-compliant with a law or industry requirement, you make it easy for insurers to deny your claim based on objective standards not being met.
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