NEW YORK—What are the average costs for a data breach? One company claims to have developed an accurate assessment model.
The model predicts that the cost of a breach involving 10 million records will fall between $2.1 million and $5.2 million (95% of the time), and depending on circumstances could range up to as much as $73.9 million. For breaches with 100 million records, the cost will fall between $5 million and $15.6 million (95% of the time), and could top out at $199 million.
In assembling the Verizon 2015 Data Breach Investigations Report, the company’s security analysts used the new model to gauge the financial impact of a security breach, basing findings on the analysis of nearly 200 cyberliability insurance claims, the company explained.
The model accounts for the fact that the cost of each stolen record is directly affected by the type of data and total number of records compromised, and shows a high and low range for the cost of a lost record (i.e. credit card number, medical health record).
“We believe this new model for estimating the cost of a breach is groundbreaking, although there is definitely still room for refinement,” Mike Denning, vice president of global security for Verizon enterprise solutions. “We now know that it’s rarely, if ever, less expensive to suffer a breach than to put the proper defense in place.”