Security breaches are something that few businesses address before they happen. And yet, most breaches could have been prevented with the proper technical safeguards in place. Today, we’re going to talk about the very real consequences which face your business if you do not take the proper precautions.
Compromised Client Trust
Brands work long and hard, for years, to solidify trust with clients. It’s hard to gain, but it’s easy to lose. One of the quickest ways to erode relationships with clients is to leave them exposed to security breaches. This is especially true if client data has potentially been compromised as a result of a breach. Reputational damage can translate directly to a loss of business. If you’re not careful, you risk losing clients, investors, suppliers, and eventually, your business.
Cyber fraud has sizable consequences for the companies that experience it. Stolen data can be worth quite a lot to hackers, as there is a strong and active market for it to be resold for significant profit. Intellectual property theft, similarly, can have devastating effects. A company could lose its competitive advantage, even after years of work in a specific sector. While some large businesses are able to recover from theft, smaller companies are disproportionately saddled with lasting damages.
Cyber fraud in particular has significant costs associated with it, and can have a profound impact on day-to-day operations. In its “2020 Cost of Data Breach Study: United States,” the Ponemon Institute found that the average cost per breached record was $146. Because breaches often compromise hundreds or thousands of records, the total cost of one can be astronomical.
Not only will a security breach likely jeopardize your revenue streams, it could also result in many other forms of financial loss. From attorney’s fees to investing in a better security plan, the financial ramifications are not something to take lightly. According to Kaspersky Lab’s “Damage Control: The Cost of Security Breaches,” small businesses pay an average of $38,000 to recover from a single data breach in direct expenses alone. Don’t let a security breach be what puts you out of business.
Public Relations and Crisis Management
Depending on the size of your company, significant investments may be required to support a public relations specialist and a crisis management team. Playing damage control and operating on a short timeline often leads to expensive payouts and little to no margin for error, both in your strategy and what you’re required to pay.
Security breaches are, by nature, unexpected. When something unplanned comes up, there are always unforeseen costs. Security breaches are no different. Things like insurance premium increases, operational disruption, and increased cost to raise money are just a few among many probable costs. In fact, according to a study performed by Deloitte, over 90 percent of cyberattack impact is likely to accrue in categories that are intangible.
So, what should you do?
Nobody wants to find themselves as the victim of a security breach. The one thing that sets apart companies that bounce back from breaches from those that don’t is preparedness. Do you have technical safeguards in place? Do you have active protocols for how to protect client data? Part of our HIPAA compliance program is giving you the tools to do this. Total HIPAA is here to make sure that you fall in the prepared category, so a security breach won’t mean the end of your business.
If you would like to know more about our online HIPAA training or our customized compliance solution, HIPAA Prime, email firstname.lastname@example.org today.