What’s the Real Cost of a Cyber Data Breach?
According to the National Cyber Security Alliance, an average of 28% of small businesses suffered data breaches in the first 6 months of 2019. Some of these companies even had to close their doors due to the weight of the financial losses incurred. Data breach costs can vary by geography, industry, and business size. And given that remote working trends may not go away anytime soon, it’s more important than ever to protect your business.
From malware and spear phishing to extortion and hacking, cyber attacks compromise data security and compliance standards that serve to safeguard highly confidential business information. With an increase in the sheer volume of these violations, business owners around the world are investing in cybersecurity to minimize the costs and fallout associated with these attacks.
Save Money with Cybersecurity Prevention
At Doeren Mayhew Insurance Group, we guide business owners in finding the right insurance solutions to minimize the financial losses that come with unforeseen cyber attacks. Our customized insurance solutions can help cover the costs of restoring private data, rebuilding client trust, and recovering income losses. With the recent uptick in these types of crimes, it’s important to note the value in securing cyber liability insurance to protect your business against the substantial financial impact of becoming a cyber crime victim.
In fact, according to a new report sponsored by IBM Security and carried out by the Ponemon Institute, the average business cost of a data breach in the United States in 2020 can be as high as $8.64 million. While it’s often difficult to quantify the life-long financial effects of a cyber data breach, this study looked at 524 breaches from August 2019 to August 2020 across various regions and industries to calculate credible averages. But what are the associated expenses that add up to the real cost of a cyber data breach?
Top Costs of a Cyber Data Breach
Cyber data breaches can have many different costly consequences that affect a business’ finances, operations, and compliance in the short and long term. From detection to containment, the average process takes 280 days, but the average share of data breach costs that are incurred more than a year after the incident is 39%. It’s reported that breaches that are contained in less than 200 days can save a business upwards of $1 million, thus endorsing the need for security measures that trigger rapid detection and escalation.
While malicious attacks are the most common and represent about 52% of cyber data breaches, human errors do cause data breaches including cloud misconfigurations which account for 14% of these types of breaches. The Ponemon study looked at 17 factors that contribute to the high financial costs caused by cyber data attacks. Lost business contributed to the largest business expense at an average of $1.52 million.
According to the report, 80% of these companies said that customer PII was breached in a malicious cyber data attack which cost $175 for each compromised record. There’s also the potential for substantial savings of about 1.23 million per breach if you have an incident response plan in place ahead of an attack. Security automation technologies can also save an organization more than $3 million.
At Doeren Mayhew Insurance Group, we understand the complexities associated with creating a line of defense against modern cyber threats. Contact us to learn more about the real cost of a cyber data breach, or to learn how we can help you safeguard your business’ financial security ahead of an attack.