Computerworld

​A costly business… What does an average breached enterprise bill look like?

“Large companies pay significantly more when a security breach is the result of a trusted third party failure."

Enterprises spend an average of $US551,000 to recover from security breaches, while small to medium businesses must fork out $US38,000.

According to the worldwide survey of 5,500 companies, commissioned by Kaspersky Lab, the most expensive types of security breaches are employee fraud, cyber espionage, network intrusion and the failure of third party suppliers.

A serious IT security systems breach leads to many business issues, and in many cases the damage is so diverse, it’s hard for the victims to estimate the total cost.

The methods used for this survey rely on data from previous years to pinpoint areas where companies have to spend money following a breach, or have lost money as a result of a breach.

“We have not seen too many reports on the consequences of IT security breaches, estimating a loss in real money,” says Brian Burke, Head of Market Intelligence Team, Kaspersky Lab.

“It is hard to come up with a reliable method of producing an average, but we understood that we had to do it, to bridge the theory of the corporate threat landscape with business practice.

“As a result, we have a list of corporate threats that caused the most significant damage - the ones we believe businesses should pay the utmost attention to.”

Typically businesses have to spend more on professional services (such as external IT experts, lawyers, consultants, etc.), and earn less thanks to lost business opportunities and downtime.

The probability of each separate consequence also varies and this, along with the size of a company has to be taken into account.

A similar method was used to estimate indirect spend: the budget businesses allocate after the recovery, but is still connected to a security breach. So, on top of the aforementioned figures, businesses typically pay from $8,000 (SMBs) to $69,000 (enterprises) on staffing, training and infrastructure upgrades.

An average breached enterprise bill:

Professional services (IT, risk management, lawyers): up to $84,000 with a probability of 88 per cent

Lost business opportunities: up to $203,000, 29 per cent

Downtime: up to $1.4m, 30 per cent

Total average: $551,000

Indirect spend: up to $69,000

Including reputation damage: up to $204,750

SMBs and enterprises: different ways to suffer

“Nine out of ten companies that have taken part in our survey reported at least one security incident,” Burke adds.

“However, not all incidents are serious and/or lead to the loss of sensitive data.”

Most frequently a serious security breach is the result of a malware attack, phishing, leaks of data by employees and exploited vulnerable software.

“Cost estimation provides a new look at the severity of IT security incidents and the outlook for SMBs and enterprises is slightly different,” Burke adds. “Large companies pay significantly more when a security breach is the result of a trusted third party failure.

“Other expensive types of breaches include fraud by employees, cyber espionage and network intrusion.

“SMBs tend to lose a significant amount of money on almost all types of breach, paying a similar high price on recovering from acts of espionage as well as DDoS and phishing attacks.”