Automatic data processing companies use technology to gather, store, manipulate, prepare and distribute data for the purpose of quickly sorting large quantities of information with little human involvement. They handle services such as payroll, human resource management and benefits for other companies. Automatic data processing insurance is important for this type of company to have for several reasons.
- Vulnerability of Outside Networks – The amount of data that automatic data processing companies handle on a daily basis usually requires them to store their information on outside networks. This makes them susceptible to cyber attacks, because they can’t control the security on these networks.
- Volume of Confidential Information – Almost all of the information that automatic data processing companies handle is highly private and could cause serious legal repercussions if compromised. Automatic data processing insurance is the best way for this type of company to protect themselves and their clients from data breaches.
- Cost of a Data Breach – A cyber security breach in an automatic data processing company has substantial ramifications. Not only is there a huge cost associated with properly locating and correcting the cause of the security breach, but there is also the possibility of lawyers’ fees and settlement payouts. There may also be a decrease in business due to a lack of confidence in the company.
While there are additional reasons to get automatic data processing insurance depending on the type of company you work for, getting automatic data processing insurance to secure your clients’ safety is worth the initial time and investment.