A cyber breach occurs when someone gains access to information they should not have. In our age of digitization, all businesses face cyber attack risks that could halt operations temporarily or permanently. 
Discover the cost of a cyber breach and practical ways you can protect your business.
Calculating the cost of cyber breaches
Estimates place cybercrime losses in the hundreds of billions worldwide. Consider these common costs a business may face after a breach.
- Loss of customers — A study found that a large share of consumers would stop doing business with a company that suffered repeated data breaches.
- Business disruption — Business process failure and lost employee productivity can account for a substantial portion of total cyber attack costs; lost ideas or blueprints are additional risks. A severe attack during a busy season can threaten a large portion of annual revenue.
- Breached client records — Lost or stolen records that contain sensitive or confidential information can be costly on a per-record basis.
- Notification costs — Regulations often require notifying affected individuals, which creates additional expenses for outreach and communications.
- Public relations — Repairing reputation takes time and financial resources for media outreach, customer communications, and customer-recovery efforts.
- Legal costs — Companies may face legal defense costs and settlements from affected customers or partners.
- Regulatory fines — A breach can trigger enforcement actions or fines from regulatory bodies overseeing data privacy and payment security.
- Identity theft repair and monitoring — Providing credit monitoring and identity restoration services to victims adds to the overall breach cost.
How to reduce cyber attack risk
While no business can eliminate breach risk entirely, a combination of technology, processes, and planning reduces exposure. Start with data loss prevention tools and encryption.
Train employees to recognize phishing and to protect sensitive information and systems. Prepare an incident response team and a business continuity management plan so your organization can react quickly and resume operations.
Purchase Cyber Liability Insurance to help cover financial losses from breaches and consider additional coverage options tailored to your industry.
For coverage that focuses on customer data and breach remediation, consider policies like Data Breach (Cyber Liability Insurance) as part of a broader risk-management strategy.
A cyber breach is expensive and could harm or break your business; when you need personalized guidance, talk to your agent about options that fit your company.
Frequently Asked Questions
What is a cyber breach?
A cyber breach is unauthorized access to data or systems that should be private or restricted, which can expose personal, financial, or business information.
How quickly should I respond after discovering a breach?
Act immediately to contain the incident, assess the scope, and notify affected parties as required; faster response limits damage and helps regulatory compliance.
Can insurance cover all breach-related costs?
Insurance can cover many financial losses such as notification, forensic investigation, and legal fees, but coverage varies by policy and may not cover all costs.
What are basic steps to prepare before a breach?
Implement technical controls, train staff, maintain a documented incident response plan, and review insurance options to confirm appropriate coverage.