A breach will affect productivity & revenue
When a security breach occurs, companies have to hit pause, losing precious time and revenue. Lost business costs accounts for nearly 40% of the average total cost of a data breach. Significant revenue loss as a result of a cybersecurity breach is common. Studies show that 29% of businesses that face a data breach end up losing revenue. Of that lost revenue, 38% experienced a loss of 20% or more. Sixty percent of small businesses that are victims of a cyberattack go out of business within six months.
95% of breaches are preventable
According to Cybint, 95% of cybersecurity breaches are caused by human error, meaning they were likely preventable.
You may be responsible for legal fees related to the breach
Depending on the type of information compromised, you may be on the hook for legal fees. If a settlement is in the works, a small business could be in limbo for quite some time. It’s common for 3 to 5 years to pass between a breach and a settlement. During that time, the company is paying legal fees, expenses and filing costs—not to mention the cost of the actual settlement.
You may have to pay fines
You may be subject to legal penalties depending on the compliance regulations of your industry.
- For instance:
- Gramm-Leach-Bliley Act (GLBA) requires companies offering consumers financial products to explain their information-sharing practices and safeguard sensitive data. Fines can be as high as $100,000 for each violation, and the officers and directors of the organization may be fined up to $10,000 personally.
- General Data Protection Regulation (GDPR) mandates the use of encryption and is especially punitive, with fines potentially totaling tens of millions of dollars.
- Being in breach of Payment Card Industry Data Security Standards (PCI DDS) exposes organizations to minimum fines of $5,000 per month and maximum fines of $100,00 per month.
- Health Insurance Portability and Accountability Act (HIPAA) fines are calculated based on the number of medical records exposed with fines ranging from $50 to $50,000 per record.
The less prepared you are to deal with a breach, the more expensive it will be
The best defense is often a good offense. Fixing a data breach is not an easy or cheap task. It takes time and usually a team of specialists to sort everything out. Ransomware significantly adds to this cost — by hundreds of thousands!
Loss of trust and customers
When your operations are subpar, you will lose customers. Clients will not trust you with their personal information. Lost faith in your firm means more business for your competitor.
It can take years to recover from a breach
It can take years for an SMB to recover from the financial and reputational losses associated with a cybersecurity breach. Additionally, diminished brand reputation and increased costs concerning debt financing are not covered by insurance.
Do you struggle to keep pace with today’s cybersecurity landscape? ACE IT Solutions offers a comprehensive suite of customizable cybersecurity services to meet your organization’s specific risk profile and compliance needs so you can be better prepared to deal with breaches. Contact ACE IT Solutions at 646.558.5575 or firstname.lastname@example.org.