Data Breach Costs Top $200 Per Customer Record 54
alphadogg writes "The cost of a data breach increased last year to $204 per compromised customer record, according to the Ponemon Institute's annual study. The average total cost of a data breach rose from $6.65 million in 2008 to $6.75 million in 2009. The Ponemon Institute based its estimates on data from 45 companies that publicly acknowledged a breach of sensitive customer data last year and were willing to discuss it. In tallying the cost of a data breach, the Ponemon Institute looks at several factors, including: the cost of lost business because of an incident; legal fees; disclosure expenses related to customer contact and public response; consulting help; and remediation expenses such as technology and training."
$204 ... $20,400 -- wouldn't matter. (Score:4, Interesting)
The cost of a data breach increased last year to $204 per compromised customer record...
Insurance covers most companies. Because of this, it has gone from being a threat that must be addressed to a cost of doing business. The only thing a business is concerned about is revealing the breach to the public because it could harm its reputation. Everything else can be mopped up in the insurance and legal departments. The costs of a data breach are thus passed on in aggregate to not just the company's customers, but to every business that purchases insurance from that insurance vendor. And given the lack of diversity in the insurance market (ie, most of the market is controlled by only a few businesses) -- more than likely, that's a lot of businesses.
And that's how businesses manage risk -- and pass the costs on to you. And the problem will therefore never go away, because it's been put inside an SEP Field (Somebody Else's Problem), the most powerful repulsive force in the universe.