The cost of a data breach is an average of $4.45 million, according to a 2023 IBM report, which has increased 15% in the last three years. This figure includes direct costs, like lawsuits and fines, and indirect costs, like reputational damage. No matter the exact number, any data breach seriously impacts your business. You can use many security measures to reduce the risk and impact of a breach.

What Factors into Data Breach Costs?

The expenses of a data breach can add up due to:

  • Compromised Data: IP data, customer data, and intellectual property are common targets of data breaches. This information is valuable for your competitive edge and highly sensitive, making it an appealing target to hackers.
  • Noncompliance Penalties: Your company may face legal and regulatory repercussions from data loss. The actual cost depends on the type of data stolen, your location, and the size of the breach.
  • Incident Response and Recovery: Detecting and resolving a breach incurs costs from investigations, audits, crisis management, and communication. An inadequate response to a data breach drives the cost even higher.
  • Reputation Damage: A data breach can cause your business to lose customers and get a poor reputation. Costs associated with lost business include canceled contracts with your business partners, higher marketing spending to retain your customers, missed sales due to system downtime, and more.
  • Ransom Demands: Ransomware is a common malicious attack method. Hackers steal and hold data for ransom, which companies must pay to get their data back. While experts don’t recommend paying the ransom, organizations may pay it anyway, believing it costs less than operational downtime, noncompliance fees, and reputational harm. However, paying the ransom doesn’t guarantee the hacker will return your data.

How to Protect Your Company from a Breach

You can lower the cost of a breach or avoid a cyberattack altogether by:

  • Preparing for possible attacks through creating a disaster recovery response plan.
  • Reducing your attack surface to minimize vulnerabilities hackers can exploit.
  • Raising awareness about data breaches to prevent unintentional leaks.
  • Creating and maintaining data backups to retrieve your data after an attack.
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Enhance Your Incident Response Time with Agio

Improve your reaction to a breach with Agio’s incident response service. This 12-month program uses onboarding, exercises, quarterly and annual reviews, and more. Contact us for more information today.