Data Security Breaches Present Risks, Opportunities for Agents - 0 views
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Karl Wabst on 28 Apr 09Data security represents both a new market opportunity to sell insurance coverage and a new risk - especially for independent insurance agencies that may not be compliant with Data security laws or have plans in place to protect their own companies from Data breaches. While Data security is an evolving issue, failing to protect Data can have a huge financial impact on a company. The average total per-incident cost of a Data security breach was $6.65 million, compared to an average per-incident cost of $6.3 million in 2007, according to the "U.S. Cost of Data Breach Study" conducted by Data protection company PGP Corp. and information management research firm The Ponemon Institute. The PGP/Ponemon study indicated that Data breach incidents cost U.S. companies $202 per compromised customer record in 2008, meaning that companies incur additional costs with an abnormal churn in lost customers. More than 84 percent of Data breach cases in 2008 involved organizations that had more than one Data breach. And, more than 88 percent of all cases in the study involved insider negligence. The cost of lost business continued to be the most costly effect of a breach, averaging $4.59 million or $139 per record compromised. Lost business now accounts for 69 percent of Data breach costs, up from 65 percent in 2007, compared to 54 percent in the 2006 study. "After four years of conducting this study, one thing remains constant: U.S. businesses continue to pay dearly for having a Data breach," said Dr. Larry Ponemon, chairman and founder of The Ponemon Institute. "As costs only continue to rise, companies must remain on guard or face losing valuable customers in this unpredictable economy." Includes video: Data Security Creating Insurance Agent Sales Opportunities