The flow-on effects of a data breach can run into millions of dollars so companies need to ensure they are adequately protected if they are the target of a malicious attack, according to an article in the most recent Gallagher Market Overview Report..
In addition to proposed changes to the Privacy Act 1988 that include increased penalties of up to $10 million or more for breaches and publication of the identity of the organisation involved, if a business is forced to suspend its usual activities the impact on the share prices could become a C-suite issue.
Listed property valuation provider Landmark White has revealed that the cost of the data breach earlier in 2019 of some 100,000 customers’ account details, which resulted in consultancy being suspended by the Big Four banks and from stock market trading, is in the region of $7 million in lost revenue, while its share price plummeted.
“Along with the urgent need to respond to the data breach, the board was facing revenue loss and both regulatory and shareholder risk,” notes Gallagher National Head, Professional & Financial Risks, Michael Herron.
“Data breaches carry significant trust and reputational risk,” he explains. “If a network security, procedural or control weakness is exposed this will have a significant impact on a company’s ability to maintain shareholder relations, key trading partners and business confidence.
“Regulatory scrutiny of a data breach by the Office of the Australian Information Commissioner is increasingly likely and, when an earnings review follows, this may attract interest from the Australian Stock Exchange and Australian Securities Investments Commission.”
- Data security is increasingly interconnected with C-suite liability.
- Business interruption (BI) cover is becoming a critical element of cyber risk management.
- Companies that are growing require continual oversight and attention.
- Listed companies’ share price fluctuations can involve D&O exposures.
See Sarah Lyons, Chief Executive – Australia, and Steve White, Head of Marketing & Communications, APAC, introduce the report here.
How to access our first half-year 2019 Market Overview Report
Access the full report here. This digital version also has a full PDF version available for download and printing.