What Is the Real Cost of a Breach?

A data breach creates both direct and indirect costs.

Preparing for and preventing breaches involves charging key stakeholders and management personnel with designing effective defenses. Determining intangible breach costs presents a challenge. Other, more direct costs are easily calculated. Few studies to date have outlined detailed breach costs because each scenario has many components.

Reacting before a data breach escalates could mitigate damage, but many are not detected for at least 200 days, allowing attackers a solid head start. Businesses often hire third parties like forensics and assessment specialists to guide them through the process. While larger companies often employ specialists experienced in cyberattacks, most benefit from bringing in public relations experts to handle communications with stakeholders, management, board members and data-compromised customers during a crisis. Government regulators and investigators will need to get involved in the response plan. Companies can calculate the cost of such services and allow for costs covered by insurance.

Longer-term costs include lost revenue...