There are many studies showing the average cost of a cyber security breach. A recent article by The Globe and Mail stated that the average organizational cost of a cyber breach is $5.32-million. However, it is important to understand the elements that make up this cost, so you can make a more informed decision about protective measures. You should also consider cyber security insurance to help pay for costs associated with a breach.
- Assessment and repair. You will need to bring in some professional help to quickly identify your vulnerabilities, and patch any open holes. If you are in a regulated industry, you may need to create a more formal summary of exactly what happened and submit it to the regulator. You could expect to pay $200-400 per hour for expert consulting support.
- Credit monitoring for your customers. If part of your leak included customer credit information, you may need to provide credit monitoring services to your customers. This typically costs $100-15o per customer record per year.
- Notification of customers. Some jurisdictions require companies to notify customers if their data is breached. Even if that is not the case, you may still choose to notify your customers about what happened, and the steps you are taking to rectify the situation.
- Public relations. Any leak of customer data would impact your brand and public image. You may want to hire a PR firm to help navigate through the situation, and mitigate any lasting damage to the company.
- Legal costs. You may be sued by clients, by the regulator or by partners. All of that requires many hours of (expensive) legal support. A top-tier firm may charge $500/hour for their support.
- Business interruption. While managing through a damaging data leak, the management will naturally lose focus from the core business. In addition, customers may leave, and new customers may avoid doing business with you. All of this adds up very quickly.
All the costs above could very well lead into the millions of dollars even for a small business. Such a high price tag could end up bankrupting the company altogether. That is why it is important that you both take measures to protect yourself, but also get cyber security insurance just in case something does happen. Talk to a Zensurance expert to review your options.
Zensurance is Canada’s leading online commercial insurance broker. We offer a full range of insurance products to small businesses, with a particular focus on digitizing businesses and technology startups. We understand what it is to work with new technology, and know the most common risks of which you should be aware. Based on that (and a lot of analytics), we recommend the ideal insurance coverage for your business.