6 Direct Costs of a Data Breach
You or someone close to you has been the victim of a data breach. It happens every day and no one is immune.
This could manifest in the form of a fraudulent credit card transaction, identity theft, or locked out of your Facebook account.
The cost to consumers can range from hundreds of dollars to thousands of dollars. A direct cost could be paying that credit card bill or paying The Geek Squad to “wipe” your computer.
Cyber attacks don’t just happen to consumers. They happen to businesses too. And it’s happening more and more.
Lloyd’s of London said Cyber Liability, insurance to pay for damages caused by a data breach, is the “Fire Insurance of the 21st Century”. That means every breach could destroy a business.
Insurance alone will not entirely protect your business. It’s one piece of a comprehensive strategy that all businesses need to adopt if they want to stay in business.
The costs associated with a cyber attack are so great that 60% of SMBs go out of business within 6 months of a cyber incident.
Most business owners haven’t considered the financial impact of a data breach. I beleive this is due to the lack of education from their trusted advisors. Let’s face it, while there are well publicized attacks in the media every week, there aren’t that many people a business owner can turn to.
Based on my research and experience I’ve identified 6 direct costs that contribute to a business closing its doors:
1) Technical Investigation
2) Customer Breach Notification
3) Post-Breach Customer Protection
4) Regulatory Compliance
5) Public Relations
6) Attorney Fees & Litigation
Add these up and you can see how difficult it would be for Main Street America to stay in business.
A fire might not look so bad compared to what a cyber attack could do to your business.