The cost of a data breach increased for the fifth straight year to $204 per compromised record in 2009, but a number of factors, including an increase in the use of data breach services and the experience gained with handling previous breaches, are slowing expense increases, according to an annual study conducted by the Ponemon Institute LLC.
The Traverse City, Mich. -based research firm interviewed 45 companies, many of which had had multiple data breaches, and determined the average annual data breach costs rose from 6.65 million in 2008 to $6.75 million in 2009. The "Fifth Annual U.S. Cost of Data Breach Study," funded in part by encryption vendor PGP Corp., determines the annual cost of the breach by establishing a company's cost of lost business as a result of an incident; expenses incurred by notifying individuals and authorities of a breach; costs associated with legal fees and consulting firms and new investments made in technology and employee education.
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