Mitigating risk through proper cyber security practices is critical to protecting your company from liability – including plaintiff’s class action lawsuits.
According to a KPMG study, over the last 5 years hackers accessed 681 million records. The last two years have shown a 40% increase in the number of publicly disclosed data breaches. The Poneman Institute recently found that the mean annual cost of cybercrime in 2012 was $8.9 million per company and companies experience an average of 1.8 cyber attacks per week. According to US Investigators, China has stolen terabytes of sensitive data – from usernames and passwords for State Department computers to designs for multi-billion dollar weapons systems – from a variety of United States companies, agencies and individuals. The threat is not only external. In a recent study, 60% of employees admitted to taking data of one sort or another from their employers.
To add insult to injury, companies are susceptible to class-action litigation, and may pay an average settlement of $2,500 per plaintiff. Attorney’s fees may average more than $1 million. Clearly the high cost of a data breach suggests that a proactive approach to cyber security is not only critical, but is part of best business practices.
The Internet grew from a network of researchers to a global nervous system because practically anyone could access it from anywhere in the world. The Internet has brought about a golden age of communication; information sharing and virtual communication has occurred between cultures that may have never crossed paths. It made a very large world very small. But the Internet is not a safe environment. It is a frontier.
In the face of both increased data breach-related litigation, and pending government regulation, companies and individuals should take a very serious look at their cyber security practices.
If you’d like to discuss or need some help understanding how to proceed, shoot me an email.
