In a digital world, sensitive information has become an invaluable asset. Organizations using technology and the internet are now more vulnerable to data breaches and hacks. A data breach is an incident in which information from a system is accessed and stolen from an organization without the knowledge or permission of the system’s owner. This can be incredibly damaging for a company in the form of financial losses or a damaged reputation.
Regarding the costs of data breaches, new information from IBM’s annual data breach report shows that the average cost of data breaches has reached an all-time high. The report compiled information from more than 550 organizations that were victims of a data breach.
Exploring the Costs of a Data Breach
According to the data breach report, the average cost of a data breach is $4.45 million. That’s up 2.3% from 2022 and up 15.3% from 2020. It’s important to note that this average cost only pertains to the 16 countries that participated in the survey. Data breaches within the United States can cost more. In 2020, the average data breach cost in the U.S. reached $9.48 million.
The effects of a data breach can be wide-ranging and significant to the organization and the people whose data has been compromised. Here are some of the more common impacts of a breach:
A data breach can leave a business with a financial loss through having to notify individuals affected, providing credit monitoring services, legal fees, and lawsuits. Damage to the company’s reputation can also cause a loss in revenue.
Some businesses may be subject to fines and penalties after failing to protect customer information. When companies are found responsible, this can result in significant penalties.
Normal operations cannot continue during a data breach. IT teams have to focus on identifying the cause of the breach, what information was accessed, and what information has been stolen. This can cause delays in projects and other daily operations at a company.
After a breach, a company will want to upgrade its cybersecurity measures. This will involve training for employees and new software. This can come with high fees for a company.
What Every Business Needs To Know
Other information from the survey showed that certain tactics after a data breach occurs could reduce costs or increase them. Findings show that organizations that did not call law enforcement during a data breach experienced an extra $470,000 on average and also endured longer recovery times.
Fifty-one percent of organizations mentioned they plan to increase their cybersecurity funds to better protect themselves from data breaches. More than half of them said they would pass on these costs to customers.
A new area of cybersecurity involves using Artificial Intelligence to help detect breaches. There are tools available to help businesses identify these issues much quicker than organizations that rely on more traditional methods or less advanced technology. There is a stark difference in data breach costs between organizations that utilize AI versus those that do not. The study found that the cost difference between the two is $1.76 million.
Comprehensive Insurance Solutions You Need
Increased cybersecurity measures benefit transportation businesses. The risk of companies becoming victims of cybercriminals is more prevalent. Cyber insurance policies can be a significant help in covering liabilities that can arise after a data breach. It’s just as important as ensuring you have adequate and comprehensive public auto or truckers insurance.
RRL Insurance has insurance options that can protect your fleet of vehicles. Please contact us to learn more about what we can offer you! We look forward to working with you!