While the impacts of a cyberattack will be felt differently by small and large businesses, the damage caused by a breach can create a significant dent in a business’s bottom line, no matter its size.
Тhe average security breach on a small business will cost about US$75,000. The amount includes the costs of downtime, lost business opportunities and the services the company will need to hire to mitigate the cybersecurity breach. Small businesses pay, on average, about $15,000 in professional services, including the hiring of IT security and risk management consultants, lawyers, auditors, accountants and public relations consultants.
The impact is even more costly to larger businesses, where the average cybersecurity breach costs about $1,000,000.
Evaluating the “Hidden” Costs of a Cyber Attack
Common perceptions, however, are mostly shaped by what companies are required to report publicly, such as the theft of personally identifiable information (PII), payment data, and personal health information (PHI). Costs related to customer notification, credit monitoring, and the possibility of legal judgments or regulatory penalties. Today, the industry is converging on a “cost per record” calculation for consumer data breaches.
Cases of intellectual property (IP) theft, espionage, data destruction, attacks on core operations, or attempts to disable critical infrastructure are rarely brought into view. These attacks can have a more significant impact and lead to additional costs that are more difficult to quantify.
Given the impact and prevalence of cybersecurity breaches, executives must be aware of direct impact costs to their businesses and the number of hidden costs associated with a cybersecurity breach:
- Insurance premium increases
- Increased borrowing costs
- Operational disruptions or destruction
- Customer relationship losses
- Value of lost contract revenue
- Devaluation of the trade name
- Loss of intellectual property
Cyber Attacks Cause More Than Just Financial Pain
A business’s success depends heavily on its reputation and perception in the marketplace and the value it delivers in the long-term. Cyber-attacks cause damage that cuts deeper than dollars and cents: mitigating an attack’s impact requires a focus on managing risks and vulnerability to cyber attackers to ensure your business’ reputation remains intact.
There are many ways a cyberattack can affect – and cost – an organization, and the impacts will vary depending on the nature and severity of the event. And no business is immune.