When cyber-attacks hit big businesses, expensive problems can result, but the company may be able to absorb the costs.
Small firms are in uncharted territory after a cyber-attack. On average, a cyber-attack can cost them anywhere from $120,000 to $1.24 million. Whatever the final price tag, it will represent a bigger threat to a small firm’s revenue and viability.
Costs associated with a cyber incident are many and mount up quickly:
- Ransomware payments made to quickly release encrypted data or computer systems
- Financial loss due to social engineering (criminals tricking targets into sharing security credentials or transferring money)
- Forensic IT costs to determine the cause and extent of a data breach
- Lost income due to business interruption
- Cost of notifying third parties and providing credit monitoring or other compensation to affected individuals
- Public relations campaigns and losses due to the business’s damaged reputation
- Legal fees and court judgments
In 2019, 37% of small businesses affected by a data breach suffered a financial loss, 25% filed for bankruptcy, and 10% went out of business.
The cost of healthy cyber security pales in comparison to the cost of recovering from a cyber-attack—should recovery be possible.
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Lee Norcross, MBA, CPCU
California License # 0D87292
L Squared Insurance Agency, LLC ® DBA in California as
L2 L Squared Insurance Agency, License # 0L93416
Managing Director, CEO
(616) 940-1101 Ext. 7080