Ghost Breaches: Uncovering Cybersecurity Losses Years Later
Download MP3Introduction:
Cybersecurity breaches can have far-reaching consequences beyond the initial attack, with costs continuing to escalate long after the incident. In this episode, we delve into the concept of "ghost breaches," where the financial impact of cyber attacks can haunt companies for years.
Rackspace Case Study:
Cybersecurity breaches can have far-reaching consequences beyond the initial attack, with costs continuing to escalate long after the incident. In this episode, we delve into the concept of "ghost breaches," where the financial impact of cyber attacks can haunt companies for years.
Rackspace Case Study:
- In November 2022, Rackspace, a major internet hosting provider, experienced a cyber attack, resulting in initial losses estimated at a few million dollars.
- Nearly a year later, by November 15th, 2023, the costs had skyrocketed to nearly 12 million dollars, including legal fees, professional services, and third-party liability.
- Despite initial estimates, expenses continued to mount, highlighting the long-term financial ramifications of cybersecurity breaches.
Understanding Longtail Costs:
- Longtail costs, such as third-party liability, often emerge after the initial incident, significantly impacting companies financially.
- Financial disclosures from Rackspace reveal ongoing expenses due to remediation efforts, legal fees, and third-party liabilities, exacerbating the financial strain.
Stellantis and Third-Party Liability:
- Stellantis, known for producing Jeep, Chrysler, and Ram trucks, faced disruptions in production due to a cyber attack on their supplier, Yinfang.
- The losses incurred by Stellantis as a result of the supplier's cyber attack highlight the interconnected nature of cyber risks among business partners.
- Business insurers are increasingly emphasizing the importance of cyber resilience for contractors, acknowledging the potential liability if a company's cyber attack affects vendors or clients.
Implications for Businesses:
- Cybersecurity breaches can have cascading effects, impacting not only the targeted company but also its business partners.
- The delayed realization of liabilities and losses underscores the need for comprehensive cybersecurity and insurance strategies.
- Studies show that 60% of small businesses fold after a cyber attack, emphasizing the critical importance of understanding and mitigating the domino effect of cyber incidents.
Conclusion:
Businesses must consider the upstream and downstream impacts of cyber attacks, including potential third-party liabilities. Implementing robust cybersecurity measures and comprehensive insurance plans is essential for safeguarding against the long-term financial consequences of cyber breaches.
If you have questions or want to delve deeper into today's topics, visit at Riskcoverage.com for additional resources. Until next time, stay insured and stay informed!
Businesses must consider the upstream and downstream impacts of cyber attacks, including potential third-party liabilities. Implementing robust cybersecurity measures and comprehensive insurance plans is essential for safeguarding against the long-term financial consequences of cyber breaches.
If you have questions or want to delve deeper into today's topics, visit at Riskcoverage.com for additional resources. Until next time, stay insured and stay informed!
