Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: June 11, 2014
The Firm
201-896-4100 info@sh-law.comLate last month, the online auction site revealed that hackers had gained access to its primary database, which was used to store user passwords. Although the company maintains that there is no evidence that the compromise resulted in unauthorized activity, it has advised all users to change their passwords. For companies like eBay, the cost of data breaches and cleaning up after cyberattacks and other security breaches continues to rise. According to the Ponemon Institute’s 2014 Cost of Data Breach Study, the average cost of a data breach was $3.5 million last year, representing a 15 percent increase over 2012 figures.
In the United States, the study examined the cost of data breaches incurred by 61 companies across 16 different industries. Below are several key takeaways from the report:
The report confirms that the top causes of data breaches continue to include malicious attacks, human error, and system malfunctions. Cyberattacks account for 42 percent of all data breaches, while employee negligence and system glitches account for 31 and 25 percent of data losses, respectively.
Malicious or criminal attacks result in the costliest breaches at an average of $246 per compromised record. By comparison, system malfunctions and human errors resulted in a much lower average per capita cost at $171 and $160, respectively.
Companies are losing more customers following a security breach. The average abnormal churn rate between 2013 and 2014 increased 15 percent. Reputation and the loss of customer loyalty cause the most serious damage to a company’s bottom line.
In terms of customer relations, the hardest hit include the pharmaceutical, financial services, and healthcare industries. Surprisingly, retailers have less difficulty bouncing back from a breach.
For the first time, the study found that having business continuity management involved in the remediation process reduces the cost of the breach by an average of $13 per compromised record. Other factors, such as having a strong security posture or a formal incident response plan in place prior to the incident, reduced the cost by as much as $21 and $17 per record, respectively.
So what’s your opinion on the cost of data breaches? Feel free to leave a comment below.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, like all M&A transactions, it is important to understand the legal nuances and proper due diligence in mergers and acquisitions. What Is a Short Form […]
Author: Dan Brecher
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!