The Cost of Continuity

I recently wrote an article for SupportWorld on how to build an effective business continuity plan.  It focused on what you need to do to be prepared for an event.  After I wrote it, I did some additional research on just how badly a business can be impacted by a disaster.

Often, when we think of a disaster, we think of storms like hurricanes or tornados, earthquakes, or other catastrophic – but natural – events.  And these types of disasters can have a huge impact on business.

The cost natural disasters has hovered around $100 million annually since 2012, with some huge spikes in 2007 ($200 million) and 2011 ($380 million) due to major hurricanes.  Since 2000, natural disasters have cost the global economy over $3 trillion dollars. 

One out of three small-to-medium business owner will be personally affected by extreme weather, and the average loss due to a major weather event is $3,000 per day.  Sadly, most of these businesses – 84% – do not have insurance.

While natural disasters have a high cost, it pales in comparison to man-made events.  While the exact cost is difficult to determine because many attacks go unreported, estimates range from a low $5 trillion to the tens of trillions.  There’s been a nearly-70% increase in the number of security events in the last five years, and that number is expected to continue to increase.  The average cost of an attack rose from $1.4 million to $13 million dollars!

The business losses due to a cyber attack are also much higher than seen with natural disasters, because often these events come with bad publicity or expensive remediation plans.  Business disruption due to a cyberattack is around $4 million, and the cost of lost information is nearly $6 million!

We generally hear about it when a big corporation is hit, as it makes headlines on all the media outlets.  Small to medium size business are much more likely targets, and we rarely hear about these as it often goes unreported.

Over 43% of attacks target smaller organization, and only 14% of them feel they have an effective continuity plan.  Of the companies attacked, 60% will go out of business with six month.  Surveys show that 55% have experienced some sort of attack, and 50% have said they had data breaches of customer information.

Most attacks are web-based or social engineering type attacks, but there’s been a marked increase in the number of ransomware incidents in the last few years.

These are some startling statistics, and it underlines just how important is has become for a business to be prepared.  More and more organizations are beginning to look at implementing business continuation, and as attacks increase the need for qualified people to mitigate them will be critical.

Sources:

• https://www.statista.com/statistics/612561/natural-disaster-losses-cost-worldwide-by-type-of-loss/
• https://www.businessinsider.com/natural-disasters-and-business-infographic-2015-2
• https://databreachcalculator.mybluemix.net/
• https://smallbiztrends.com/2017/01/cyber-security-statistics-small-business.html
• https://www.accenture.com/_acnmedia/pdf-99/accenture-cost-cyber-crime-infographic.pdf