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Cyber-attacks come with two, separate costs

(Image credit: Image Credit: Kim Britten / Shutterstock)

Businesses have been warned that they may be hit for damages in multiple ways after being affected by a cyber-attack.

A new report by Lloyd's of London (opens in new tab) says there are two different costs linked to a cyber-attack: a one-off cost, and a “slow –burn” effect. The one-off cost is the visible one – notifying customers, paying ransom, paying for public relation expenses, things like that.

But there is also the ‘slow-burn’, which can sometimes even be more expensive than the one-off price, and that includes things like loss of customers, fall in share price, or reputation damages. 

“There is a lack of understanding as to what cyber attacks can mean,” Lloyd's chief executive Inga Beale told Reuters. “Businesses need to prepare for the full costs of a cyber attack.” 

Describing the effects of the slow-burn, the report takes the recent TalkTalk breach as an example. The telecommunications company TalkTalk was breached in 2015. The one-off cost of the breach climbed up to $52 million, but the slow-burn cost ended up being $44 million. And that includes an estimate for lost revenue.

The report came on the back of a couple of extremely powerful ransomware cyberattacks. First there was WannaCry, which paralysed many organisations and hit the NHS badly. Earlier this week, we witnessed the Petya/NotPetya attack which security researchers believe could be even more dangerous. 

Image Credit: Kim Britten / Shutterstock

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.