A Small Business Guide to Computer Encryption

Encryption is a difficult concept to grasp, but it’s a necessary part of protecting your business’s sensitive data. At a basic level, encryption is the process of scrambling text (called ciphertext) to render it unreadable to unauthorized users. You can encrypt individual files, folders, volumes or entire disks within a computer, as well as USB flash drives and files stored in the cloud.

Why is encryption important?

The purpose of file and disk encryption is to protect data stored on a computer or network storage system. All organizations, including small to midsize businesses (SMBs), that collect personally identifiable information (PII) like names, birth dates, Social Security numbers, financial information and the like, must secure that information. An organization can be sued if a computer containing PII is stolen and the information is leaked or shared.

According to Joe Siegrist, vice president and general manager of ​LogMeIn’s​ LastPass password management software, encrypting your entire hard drive is good business practice.

“Laptops are frequently lost or stolen, so SMBs should take steps in advance to protect the data on them to prevent them from being a data breach risk,” Siegrist said. “To keep data safe from prying eyes, install a full disk encryption tool on employee computers and laptops.”

If a laptop is lost or stolen and the files or disk isn’t encrypted, a thief can easily steal the information. He or she doesn’t even need to know the sign-on password to access the files – it’s easy to boot a computer from a USB thumb drive and then access the disks within the computer.

That being said, disk encryption doesn’t protect a computer entirely. A hacker can still access the computer over an insecure network connection, or a user can click a malicious link in an email and infect the computer with malware that steals usernames and passwords. Those types of attacks require additional security controls, like anti-malware software, firewalls, awareness training and so on. However, encrypting a computer’s files or the entire disk greatly reduces the risk of data theft.

Types of computer encryption

Individual file and folder encryption does just that — it encrypts only specific items that you tell it to. This method is acceptable if relatively few business documents are stored on a computer, and it’s better than no encryption at all.

One step up is volume encryption, which creates a container of sorts that’s fully encrypted. All files and folders created in or saved to that container are encrypted.

Full-disk or whole-disk encryption is the most complete form of computer encryption. It’s transparent to users and doesn’t require them to save files to a special place on the disk – all files, folders and volumes are encrypted.

With full-disk encryption, you must provide an encryption passcode or have the computer read an encryption key (a random string of letters and numbers) from a USB device, when powering on your computer. This action “unlocks” the files so you can use them normally.

Built-in encryption programs

Strong encryption is built into modern versions of the Windows and OS X operating systems, and is available for some Linux distributions as well.

Microsoft BitLocker is a disk encryption tool that’s included in Windows 7 (Enterprise and Ultimate) and the Pro and Enterprise editions of Windows 8.1 and Windows 10. It’s designed to work with a Trusted Platform Module (TPM) chip in your computer, which stores your disk encryption key. It’s possible to enable BitLocker even without the chip, but a few settings must be configured within the operating system, which require administrative privileges.

To enable BitLocker, open Windows Explorer or File Explorer and right-click on Drive C:. If your version of Windows supports BitLocker, the menu will display a “Turn on BitLocker” option, which you can click to enable the program.

When you enable BitLocker, Microsoft prompts you to save a copy of your recovery key. This is an important step because you need the recovery key to unlock your disk. Without the key, neither you nor anyone else cannot access the data. You can save the key to your Microsoft account, to a file or print it. BitLocker also lets you require a PIN at startup.

Apple FileVault provides encryption for computers running Mac OS X. When enabling encryption, FileVault prompts you to store the disk encryption recovery key in your iCloud account, but you can choose to write it down instead.

For Linux, you typically encrypt the disk during installation of the operating system, using a tool such as dm-crypt. However, third-party tools are also available for post-installation encryption.

Third-party encryption programs

TrueCrypt used to be one of the most popular open-source disk encryption software programs, but its developers stopped maintaining it in 2014. Security experts are still torn over whether it’s safe to use. To be on the safe side, stick with a product that’s regularly tested and updated. The following products are a few open-source products that are well regarded:

• VeraCrypt: Free software that runs in Windows, Mac OS X and Linux. Frequently gets the highest ratings from users and third-party testers.
• DiskCryptor: Geared for new and old versions of Microsoft Windows. Can encrypt partitions and entire disks.
• Gpg4win: Uses military-grade security to encrypt and digitally sign files and emails.

Many anti-malware vendors, such as Symantec, Kaspersky, Sophos and ESET, include encryption in their security suites or sell it as a stand-alone product. For a side-by-side comparison of the best retail encryption software on the market, visit the landing page on our sister site, Top Ten Reviews.

USB drives should also be encrypted, because when you copy files from an encrypted disk to a USB drive, the files can be automatically decrypted.

“It’s important to educate employees that once they send a file via email or copy it to a USB thumb drive, that data is no longer protected by that encryption,” Siegrist said.

To ensure files on a USB device are encrypted, use software like Microsoft BitLocker To Go, open-source software or purchase USB drives that come with encryption, such as IronKey, SanDisk and Kanguru.

Best practices for computer encryption

Before enabling encryption on your computer, back up your data files and create an image backup, which is a replica of all the contents of your disk. You should also ensure that you have the operating system’s installation media and create an emergency boot disk on removable media.

Going forward, keep your computer backed up regularly. An encrypted disk that crashes or becomes corrupt can result in files being lost forever. If you have a current backup, you can be up and running fairly quickly.

When creating a passcode or PIN, use random numbers and/or letters, and memorize it. The longer and more complex the better, but not so complex that you can’t remember it. Consider putting two phrases together, like short verses from two songs you like. Use only the first letter of each word, and substitute some characters, such as a zero for an “O” and a “3” or a pound sign (“#”) for an “E.” Use mixed capitalization as well. More tips for creating a strong password can be found in this Business News Daily article.

Keep a written copy of your PIN or passcode, and your encryption key (if separate), in a safe place, in case you forget them. If you enable full-disk encryption and forget your passcode, you won’t be able to access your computer, and neither can anyone else, including IT personnel or even a data recovery service, Siegrist said.

If you use Wi-Fi, use Wi-Fi Protected Access 2 (WPA2), which is a form of encryption for protecting wireless connections. Don’t use Wired Equivalent Privacy (WEP), which isn’t safe under any circumstances.

Finally, use a virtual private network (VPN) to access the office network from a laptop or other mobile device when working remotely. A VPN creates a secure tunnel over the internet, encrypting all data that you send and receive during that session.

Remember, computer encryption is only one part of a complete security plan for protecting computers and confidential data. It’s a necessary security control for organizations that handle confidential data, and should be enabled on any device that could fall into the wrong hands. Visit our small business cybersecurity guide for more tips and advice.

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