In an earlier post, we advised that the average loss for a large company resulting from a cyber security breach cost around $5.9 million, or roughly Baht 185 million.
On average, a Poneman Institute study found that, in the US, a data breach resulted in around 29,000 compromised data records with an approximate cost of about Baht 6,400 (US 201) per record.
The study also found that the most costly and damaging element of a data breach was the loss of a company’s reputation and the loss of customer loyalty. The costs of being hacked often surpassed the actual cost of remedying the cause/s of the cyber security breach itself and is illustrated with this table showing the average costs of a data breach:
- $3,300,000 Lost business costs
- $1,600,000 Post-breach costs
- $574,000 Legal defence costs
- $509,000 Notification costs
- $258,000 Legal settlement costs
The most costly data breaches were malicious and criminal attacks which accounted for 42% of all breaches, followed by human error (negligent employee or third party contractor), IT system glitches and business process failures. Worryingly, one fifth of data breaches came about from lost or stolen mobile devices such as laptops, tablets and mobile phones.
Cyber security insurance
One interesting finding of the study was that companies with good IT security protocol and practices were more likely to purchase insurance against the cyber security threat. This runs contrary to what was the prevailing thought that having insurance discouraged companies to maintain good security.
Thus, cyber security insurance plays an important role not just in mitigating the risk of and managing a data breach but in enhancing the security standing of a company.
The cyber security issue is a serious one for businesses with an online presence, and having cyber insurance is fast becoming a necessity.
Trafalgar International understands the complexity of the cyber threat risk and is able to advise on the insurances available to help mitigate the exposures related to your specific industry and business.