How Much Would Data Theft Cost You? Calculate It Online - InformationWeek

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How Much Would Data Theft Cost You? Calculate It Online

An insurance company has posted online a free calculator that helps managers figure out what a data loss or security breach would cost their company.

Worried about how much a network security breach or data theft might cost? There's a new way to figure it out.

Darwin Professional Underwriters, a specialty insurance company and provider of technology liability insurance, has posted an online calculator to help IT managers calculate how much their company stands to lose from data theft.

The Tech//404 Data Loss Cost Calculator is a free, interactive tool designed to assess the impact of a data breach or identity theft data loss incident, according to a release. Analysts at the Farmington, Conn.-based company studied data from media reports, as well as several industry analyst reports, to develop the tool's proprietary algorithms.

"Until now, organizations have struggled to assess the scope of their financial risk should they be hit with a data loss incident," said Adam Sills, a lead underwriter with Darwin, in a written statement. "Meanwhile, the explosion of corporate data collection and storage is putting nearly every organization at risk."

He added that it's becoming increasingly important for companies to calculate -- and prepare for -- their own risk.

"Major data losses in health care, financial services, and retail industries are reported almost weekly, and the financial consequences can be severe," Sills added. "Affected companies can be hit with very substantial costs both from regulatory compliance and from liability issues. We believe it's imperative that organizations have a clear understanding of the bottom-line impact of data theft. The quantification of business risk -- even a best estimate -- is often the quickest path to building awareness for CEOs and CFOS alike."

On Wednesday, Forrester Research Inc. released its own calculations, noting that the average security breach can cost a company between $90 and $305 per lost record. Forrester Senior Analyst Khalid Kark said in the report that it's important to be able to make an educated estimate of the cost of a data loss.

The loss of sensitive data can have a "crippling impact on an organization's bottom line, especially if it is ill-equipped," he added.

According to Darwin, organizations can use the Tech//404 Data Loss Cost Calculator to estimate their financial exposure in three categories: internal investigation expenses; customer notification and crisis management expenses, and regulatory/compliance expenses.

Information on recently reported data losses also is available in an archive at this Web site.

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