The Rising Cost of Data Breaches

By Ericka Chickowski on 2010-02-03

The impact of security incidents is increasing, according to the Ponemon Institute's Cost of Data Breach study, which highlights a survey sponsored by PGP. Ponemon found that the price tag for breaches will rise again this year, particularly when it came to the "ex-post" response necessary to make things right with irate customers once they'd been notified.

See our article on the survey.

The Rising Cost of Data BreachesBy Ericka Chickowski

The Rising Cost of Data Breaches - Security

Average Breach Cost Per Organization

2010: $6.75 million2009: $6.65 million

Average Breach Cost Per Record

2010: $2042009:$202

Cost Per Record

Direct Costs: $60Indirect Costs: $144

Cost Per Record by Cause

Malicious Attack: $215Negligent Insider: $154Systems Glitch: $166

Ex-Post Costs Grow

The cost of lost business went down, but the cost of legal defenses went up.

Customer Turnover Rose

Abnormal Customer Churn Rate 2010: 3.7%Abnormal Customer Churn Rate 2009:3.6%

Third-Parties Threats

Ratio of Breaches Caused by Third Parties: 42%Extra Costs Incurred Due to Third Party Causes: $21 more per record

Malicious Attacks

Ratio of Breaches Caused by Malicious or Criminal Attack: 24%

First Cut is the Deepest

Per Record Cost for Organizations Experiencing First Breach: $228Per Record Cost for Organiztions Experiencing Two or More Incidents: $198

Slow and Steady

Costs per record rise when companies inform customers too quickly: $219 vs. $196 per record

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