Cyber risk is loosely defined as the chance of injury, damage or loss from an electronic exposure of sensitive data that results in an adverse impact on a business. While cyber risk has long been associated with e-commerce firms, any firm that holds sensitive data in an electronic format is exposed to the threat of data loss.

The fact is . . . data is the lifeblood of most organizations. Data drives everything an organization does – from sales & marketing, to customer service, to billing, to employee management, to stakeholder relations.

Therefore, data breaches — whether they stem from the work of an outside hacker or innocent errors made by staff — can cause huge disruptions for the companies whose information is leaked. And the cost of fixing the breaches and compensating individuals whose private information was released can be substantial. According to an annual FBI Computer Security Institute cyber-crime study, the disclosure or theft of sensitive data costs organizations an average of $710,000 per incident.

The bad news is that data breaches are not only a reality in today's risk management landscape, they're a near-certainty for just about any business. No organization is immune from the threat of data breaches, no matter the size of their information security budget or their level of technical sophistication. Studies such as the annual CSI Computer Crime and Security Survey and Verizon Communications 2010 Data Breach Investigations Report have shown that approximately 80% of all companies will suffer one or more data breach incidents each year.

The good news is that companies can protect themselves. NetDiligence® provides cyber risk assessment services to help chief financial officers and risk managers better understand whether their organizations deploy reasonable and prudent safeguards to minimize data breach losses and liability risks. And, when data breaches occur, NetDiligence provides breach response services to help companies limit the damage and recover more quickly and cost-effectively.