A recent report conducted by Symantec Internet Security has estimated over 34,000 known data breaches occur daily. While not all breaches result in compromised personal and confidential information, the sheer numbers are staggering. In order for a variety of industries to remain protected, a Cyber Liability Insurance Program is recommended.
A panel of security experts, led by Joan K. Woodward, President of Travelers Institute and Executive Vice President of Public Policy, determined that small to medium sized businesses are at the highest risk as one successful breach can devastate the entire operation. To put these threats into perspective, Woodward and her team conducted a thorough analysis of a few specific industries and the financial effects on each.
Healthcare Industry- In an example demonstrating a doctor who left his work-issued unprotected laptop behind that contained 550 patient records, the costs were as follows: Incident Investigation Costs $180,000; Customer Notification and Crisis Management Costs $34,000; Fines and Penalties $167,000, totaling an estimated $381,000, according to Property Casualty 360. To combat these potential risks, implement proper safety procedures and protect confidential information using encryption and remote disabling capabilities.
Financial Industry- In the event of an attack on a bank that caused their online banking to go down for three days and whose net assets totaled $350 million, the estimated costs would be as follows: Incident Investigation Costs $192,000; Customer Notification and Crisis Management Costs $475,000; Fines & Penalties $132,000, totaling $799,000. As this breach can cost close to a million dollars in financial damages, protecting network security and assets are critical. Not to mention, these costs do not include the actual funds that the bank might have lost from the breach and loss of business income. Experts recommend a disaster recovery plan and implementing a system within the security network to alert any suspicious activity.
IT Industry- An employee mistakenly opens a phishing e-mail, exposing names, financial information, credit card and bank account information, etc. NetDiligence Data Breach Cost Calculator estimated the costs to be the following: Incident Investigation Costs $291,000; Customer Notification and Crisis Management Costs $504,000; Fines & Penalties $55,000, totaling $1,345,000. Security policies should be explicitly discussed with employees, and include a cybersecurity provision within vendor contracts to reduce the risk of loss and litigation.
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