Insights and Resources
The cost of a data breach: 2022 NetDiligence® Cyber Claims Study
GUIDE | October 05, 2022
Authored by RSM US LLP
Understanding the ongoing cybersecurity threats to the middle market
As cybersecurity threats and data security events continue to increase, understanding the costs and resources necessary to respond to a data breach is essential. RSM US LLP is a proud sponsor of the 12th annual NetDiligence® Cyber Claims Study, a report detailing the actual losses from data breaches and other cyber-related incidents covered by leading cyber insurance carriers.
This year’s report features an analysis of almost 7,500 claims arising from events that occurred between 2017 and 2021. Ransomware and business email compromises are the two leading causes of loss in the NetDiligence survey, accounting for 44% of all claims during the full five years of data and nearly 50% from just 2020-21.
"This year’s study has made it apparent that the cost of a cybersecurity incident can vary depending on the incident response and resiliency plans a company has in place. If the organization has a strong resiliency plan, business interruption and recovery costs could potentially be mitigated, and the overall cost and impact to the business could be reduced."
Tauseef Ghazi, RSM National Leader, Security and Privacy Services, RSM US LLP
Almost all the claims in the survey (98%) were from small to medium enterprises with less than $2 billion in annual revenue. While large companies represented only 2% of claims, they accounted for 51% of the total incident cost in the report. However, the study shows no clear correlation between company size and the cost of a breach. Smaller organizations experienced large losses as well, with perhaps more of an impact than at larger companies.
Escalating recovery expenses are a reminder of the importance of establishing a resilient cybersecurity environment. Recovery costs have been steadily increasing since 2017, with total incident expenses rising since 2018. In fact, over the last five years, claims with recovery expenses were about 60% higher, and in 2021, incident costs were over 300% higher when recovery expenses were incurred. So not only does an incident cost the business, but significant recovery costs must also be considered in many instances.
Call us at +1 213.873.1700, email us at firstname.lastname@example.org or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by RSM US LLP and originally appeared on Oct 05, 2022.
2022 RSM US LLP. All rights reserved.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Vasquez & Company LLP is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Vasquez & Company LLP can assist you, please call +1 213.873.1700.