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PGP and the Ponemon Institute have just announced results of the fifth annual U.S. Cost of a Data Breach Study. The overarching conclusion is that breaches are getting more expensive.<\/p>\n
\nData breaches cost U.S. companies $204 per compromised customer record in 2009. That compares to $202 in 2008. Despite an overall drop in the number of reported breaches — the Identity Theft Resource Center reports 498 in 2009 vs 657 in 2008 — the average total per-incident cost in 2009 was $6.75 million. In 2008, that number was $6.65 million.<\/p>\n
\n“In the five years we have conducted this study, we have continued to see an increase in the cost to businesses for suffering a data breach,” said Dr. Larry Ponemon, chairman and founder of the Ponemon Institute. “With a variety of threat vectors to contend with, companies must proactively implement policies and technologies that mitigate the risk of facing a costly breach.”<\/p>\n
The Good, Bad and Ugly<\/p>\n
\nThe bad news is that data breaches as the result of malicious attacks and botnets in 2009 were the most costly and severe. The most expensive data breach in last year’s study cost a company nearly $31 million to resolve. The least-expensive cost for a company was $750,000.<\/p>\n
\nNoteworthy is the fact that third-party organizations accounted for 42 percent of all breach cases, a 44 percent decline from 2008. These remain the most costly form of data breaches, due to the need for additional investigation and consulting fees. The study also revealed organizations are spending more on legal defense in the face of increasing fears about successful class-action suits related to data breaches.<\/p>\n
\nThe good news is that negligent insider breaches have decreased in number and cost, most likely resulting from training and awareness programs that are making a positive impact on employee sensitivity about protecting personal information. And… <\/p>\n
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