Breach cost $53m in Q2, says Desjardins

By Warwick Ashford for ComputerWeekly
Tuesday, August 13, 2019

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Credit union cooperative Desjardins reveals that a data breach in June cost the company $53m in the second quarter, but that could be just the start, warn industry commentators.

Ilia Kolochenko, founder and CEO of web security company ImmuniWeb, said the second-quarter cost is likely to be the start of financial losses and spiralling spending that will likely last for years.

“Most businesses foreseeably downplay data breach losses, omitting vital components of the inflicted damages in their calculations,” he said.

According to Kolochenko, individual and collective lawsuits initiated by the victims, even if settled with comparatively “scanty compensation” afterwards, usually end years after the breach.

“Penalties and regulatory fines imposed by the governments, often in different countries thereby aggravating the costs, likewise are not of an immediate nature,” he said.

“Last but not least, the ongoing reputational damage and loss of business is frequently incremental, but somewhat imperceptible. Most customers and partners won’t resign their contracts with a hacked company immediately after the incident for a diversity of practical reasons, though they will undoubtably have less intention of renewing their contracts afterwards.”

Cyber security insurance is one possibility that organisations should explore to handle data breaches, said Kolochenko.

“However, given the emerging nature of this market, it’s a slippery slope and insurance contracts should be meticulously revised by a trusted law firm and cyber security experts for mushrooming exceptions and waivers,” he said. Read Full Article