Managed IT ServicesMost business data now lives online: in email, cloud apps, shared drives, and laptops that travel everywhere. That makes protecting it a basic part of running a business. Yet many organizations don’t understand how leaks actually happen. Knowing the most common causes of data leakage is the first step to stopping them.
Data leaks are expensive and damaging. IBM’s Cost of a Data Breach Report puts the 2026 global average cost of a breach at $4.99 million. Even a small leak can mean notification letters, regulatory questions, lost clients, and hours of cleanup.
Password problems remain one of the biggest culprits. Verizon’s 2017 Data Breach Investigations Report famously found that 81% of hacking-related breaches leveraged stolen or weak passwords, and stolen credentials have stayed near the top of Verizon’s findings ever since. Below are the ten most common causes of data leakage we see, and what you can do about each one.
We’ve organized the list roughly by how often we see each issue in our assessments of small and mid-sized businesses. Most organizations have more than one of these gaps at the same time, and attackers only need one. As you read, note which ones apply to you. The prevention steps under each cause are practical, and many use tools your business already pays for, such as Microsoft 365 security settings, built-in device encryption, and automatic updates. Closing even three or four of these gaps makes a measurable difference in your risk.
Data Leakage vs. Data Breach: What’s the Difference?
The terms are often used interchangeably, but there’s a useful distinction:
- Data leakage is the unauthorized exposure of data, often accidental or gradual, such as a misconfigured cloud folder, an email sent to the wrong person, or an employee uploading files to a personal account.
- A data breach usually describes an incident where an attacker deliberately gains access to systems or data.
In practice, one often leads to the other. A leaked password becomes a breach. A breach exposes data that leaks onto the dark web. Addressing the causes of data leakage reduces both.
The 10 Most Common Causes of Data Leakage
1. Phishing
Phishing tops nearly every list of causes of data leakage. It is a deliberate attempt to trick people into revealing usernames, passwords, payment details, or other sensitive information. Modern phishing emails are polished, personalized, and increasingly written with AI, which makes them harder to spot.
How to prevent it: train employees regularly, use advanced email filtering, and require multi-factor authentication so a stolen password alone isn’t enough. If someone does click, our guide on what to do after clicking a phishing link explains the next steps.
2. Malware
Malware is software designed to infect devices and networks. It includes spyware, keyloggers, trojans, and ransomware. Many modern ransomware gangs steal data before encrypting it, then threaten to publish it, so malware is now one of the leading causes of data leakage as well as downtime.
How to prevent it: keep systems patched, run managed endpoint detection and response on every device, and limit admin rights so malware can’t install itself easily.
3. Insider threats
Insider threats are among the hardest causes of data leakage to spot because they come from people inside the organization, whether malicious or careless. A departing employee might take client lists to a competitor. A well-meaning one might email files to a personal account to work from home.
How to prevent it: use role-based access controls so people only reach the data they need, monitor for unusual downloads, and remove access immediately when employees leave.
4. A weak or missing security strategy
A poor security strategy is a recipe for leaks. When protections are added piecemeal, without a plan, gaps appear between them. A strong strategy covers every device, account, network, and application, and assigns someone to own it.
How to prevent it: start with a risk assessment, document your safeguards in a written plan, and review it at least annually. Regulated businesses may be required to maintain a written information security plan.
5. Weak passwords and password sharing
Weak, reused, and shared passwords are among the most common causes of data leakage. When one website is breached, attackers try the same email and password combination on business accounts. Shared logins make it impossible to know who accessed what.
How to prevent it: enforce long, unique passphrases, provide a password manager, eliminate shared accounts, and require MFA on every system with sensitive data. Our guide to the best MFA solution for SMBs compares the options.
6. Unpatched software
Unpatched software is one of the most preventable causes of data leakage. Updates exist to close security holes. When employees ignore update prompts or systems run software that’s no longer supported, attackers can walk through publicly known vulnerabilities.
How to prevent it: automate patching for operating systems and third-party applications, and replace systems that no longer receive security updates.
7. Unencrypted data
Unencrypted data turns small mistakes into reportable incidents. Data moving across the internet (data in transit) and data stored on devices and servers (data at rest) both need protection. Without encryption, anyone who intercepts the traffic or steals a laptop can read the information. With encryption, stolen data is unreadable without the key.
How to prevent it: encrypt laptops, phones, and servers, use secure email or client portals for sensitive files, and make sure backups are encrypted too.
8. Unsecured Wi-Fi networks
Network gaps are easy-to-miss causes of data leakage. Weak Wi-Fi security, default router passwords, and guest devices on the business network all give attackers a way in. Public Wi-Fi at coffee shops and airports adds risk for traveling employees.
How to prevent it: use strong Wi-Fi encryption, put guests on a separate network, change default passwords on network equipment, and require a VPN or zero-trust access when working remotely.
9. Poorly secured cloud apps
Cloud services are convenient, but misconfigured sharing settings are one of the fastest-growing causes of data leakage. A folder shared with “anyone with the link,” an old admin account without MFA, or a forgotten app connected to your Microsoft 365 tenant can expose far more than intended.
How to prevent it: review sharing settings, require MFA for every cloud account, audit connected third-party apps, and use tools such as Microsoft Purview sensitivity labels to control how sensitive documents are shared.
10. Inadequate physical security
Not all causes of data leakage are digital. With so much attention on online threats, physical security often gets overlooked. Unlocked server closets, papers left on printers, and laptops left in cars still cause leaks.
How to prevent it: lock network equipment and records rooms, use access control and cameras where appropriate, shred sensitive documents, and encrypt every portable device.
Emerging Causes of Data Leakage to Watch
Public AI tools
Employees increasingly paste client information, contracts, or financial data into public AI chatbots to save time. Depending on the tool and settings, that data may be stored or used in ways your business can’t control. Our article on preventing data leaks through public AI tools covers practical guardrails.
Personal devices and shadow IT
When staff use personal phones, laptops, or unapproved apps for work, company data ends up outside your control. A clear device policy and mobile device management help keep business data contained.
Third-party vendors
Your vendors may hold or access your data. A breach at a software provider, payroll company, or IT vendor can expose your information even if your own systems are secure. Vet vendors, limit their access, and include security requirements in contracts.
Causes of Data Leakage by Department
Leaks rarely look the same across a business. Each team has its own habits and risks.
Front desk and reception
Shared logins, screens visible to visitors, and documents left on printers are common causes of data leakage at the front of the office. Auto-locking screens, privacy filters, and individual accounts go a long way.
Finance and accounting
Finance teams handle bank details, payroll, and invoices, which makes them prime targets for business email compromise. Verifying any change to payment instructions by phone, using a known number, is the single most important habit here.
Human resources
HR holds Social Security numbers, medical information, and compensation data. Sending these files by unencrypted email or storing them in widely shared folders creates easy leaks. Use secure portals and restrict HR folders to HR staff.
Sales and client service
Client lists and contracts often leave with departing employees or get uploaded to personal cloud storage. Role-based access, download alerts, and same-day offboarding reduce this risk.
IT and administrators
Admin accounts can reach everything, so a compromised admin login is among the most damaging causes of data leakage. Admins should use separate accounts for daily work, phishing-resistant MFA, and the minimum privileges they need.
Three Examples of How Leaks Happen
The forwarding rule. An employee enters their password on a fake Microsoft 365 login page. The attacker signs in, creates a hidden rule forwarding every email to an outside address, and reads client correspondence for weeks. MFA would have stopped the login. Alerts on new forwarding rules would have caught it quickly.
The “anyone with the link” folder. A staff member shares a project folder with a vendor using a public link. Months later, the link is still active, and it’s been forwarded well beyond the original vendor. Regular reviews of external sharing would have closed it.
The laptop in the car. A company laptop is stolen from a parked car. Because the drive was encrypted and the device could be wiped remotely, the theft is an equipment loss, not a data breach. Without encryption, it could have meant notifying every client whose files were stored on it.
Each example traces back to one of the common causes of data leakage covered above, and each was preventable with basic controls.
Training Employees on the Causes of Data Leakage
Technology handles a lot, but people make the daily decisions that keep data safe. Effective training covers the causes of data leakage employees can actually control:
- Recognizing phishing and fake login pages.
- Double-checking recipients before sending sensitive emails.
- Using approved storage instead of personal accounts or USB drives.
- Keeping client data out of public AI tools.
- Locking screens and securing devices outside the office.
- Reporting mistakes immediately, without fear of blame.
Short, regular sessions and simulated phishing tests keep these habits fresh.
How to Detect Data Leakage Early
The sooner you find a leak, the less damage it does, regardless of which of the causes of data leakage was responsible. Warning signs include:
- Sign-ins from unusual locations or at odd hours.
- Large downloads or file transfers by a single user.
- Email forwarding rules nobody remembers creating.
- Clients reporting suspicious emails that appear to come from you.
- Files shared externally that shouldn’t be.
Centralized logging, sign-in alerts, and managed detection and response turn these signs into alerts someone actually reviews.
A Simple Data Leakage Prevention Checklist
Use this list to check your defenses against the most common causes of data leakage.
- MFA enabled on email, remote access, cloud apps, and admin accounts.
- Role-based access with quarterly reviews.
- Automated patching and supported operating systems only.
- Encryption on every laptop, phone, and server.
- Email filtering and regular phishing training.
- Cloud sharing settings reviewed and restricted.
- Separate guest Wi-Fi.
- Encrypted, tested backups.
- Written policies, including AI and personal device use.
- Same-day offboarding for departing employees.
What to Do If You Discover a Leak
- Contain it. Remove public sharing links, reset compromised passwords, disable suspicious forwarding rules, and isolate affected devices.
- Preserve evidence. Don’t wipe devices or delete logs. Your IT provider and insurer may need them.
- Call your IT provider and cyber insurer. Many policies require prompt notice and specific response vendors.
- Determine what was exposed. Identify the data types, the number of people affected, and how long the exposure lasted.
- Meet notification obligations. Work with legal counsel on HIPAA, FTC, and state requirements.
- Fix the root cause. Address whichever of the causes of data leakage was responsible so it doesn’t happen again.
Having these steps written down before an incident saves valuable time when it matters most.
What Regulations Say About Data Leakage
Many businesses have legal obligations to prevent and report data exposure. Healthcare practices must follow HIPAA’s Security and Breach Notification Rules. Tax preparers, accounting firms, and other financial businesses must meet the FTC Safeguards Rule, which now requires breaches affecting 500 or more consumers to be reported to the FTC within 30 days. New Jersey’s breach notification law requires businesses to notify the State Police before notifying affected residents. Addressing the causes of data leakage ahead of time is far easier than managing these obligations after an incident.
Frequently Asked Questions
What is the most common cause of data leakage?
Stolen or weak credentials, often obtained through phishing, are among the most common causes of data leakage. MFA and employee training address both.
Is accidental data leakage still a reportable breach?
It can be. Under laws such as HIPAA and state breach notification rules, what matters is whether protected information was exposed, not whether it was intentional. Check with your compliance advisor or attorney.
What is data loss prevention (DLP)?
Data loss prevention refers to tools and policies that detect and block sensitive information from leaving your organization inappropriately, such as preventing credit card numbers from being emailed outside the company.
How often should we review our defenses?
Review access, sharing settings, and security controls at least quarterly, and complete a full risk assessment once a year. New systems, vendors, or staff changes are also good triggers for a review of the causes of data leakage in your environment.
Does Microsoft 365 include data leakage protection?
Many Microsoft 365 plans include features such as sensitivity labels, sharing controls, and data loss prevention policies, especially Business Premium and higher. They need to be configured to be effective.
Do employees need to know about data leakage?
Absolutely. Many leaks start with a simple mistake, such as sending a file to the wrong person. Training helps employees catch these errors and report them quickly.
Can small businesses afford data leakage protection?
Yes. Many of the most effective protections, such as MFA, encryption, patching, and sharing controls, are built into tools you already pay for. A managed IT provider can configure them correctly.
The bottom line: leaks rarely come from one dramatic failure. They come from small, everyday gaps that add up.
Let eMDTec Protect Your Data
Data leaks are damaging, but most of the causes of data leakage are preventable with the right mix of technology, policies, and training. Working with a managed service provider helps you build that foundation and keep it current.
eMDTec has protected New Jersey businesses since 2002. Our cybersecurity services include managed detection and response, email security, and staff training, and our backup and disaster recovery services make sure your critical data can be restored if something goes wrong. Not sure where you stand? A cybersecurity assessment will show you.
Schedule a free consultation and we’ll help you close the gaps before they turn into leaks.