{"id":114557,"date":"2023-10-12t12:55:10","date_gmt":"2023-10-12t16:55:10","guid":{"rendered":"\/\/www.g005e.com\/?p=114557"},"modified":"2024-08-27t17:00:58","modified_gmt":"2024-08-27t21:00:58","slug":"donny-shimamoto-a-data-breach-will-cost-you-plenty-directly-and-indirectly","status":"publish","type":"post","link":"\/\/www.g005e.com\/2023\/10\/12\/donny-shimamoto-a-data-breach-will-cost-you-plenty-directly-and-indirectly\/","title":{"rendered":"how much a data breach will cost you \u2013 directly and indirectly"},"content":{"rendered":"

\"\"<\/b><\/p>\n

for many, it could cost an entire business.<\/b><\/p>\n

by donny shimamoto
\ncybersecurity for accountants<\/em><\/p>\n

as quickly as the irs detects cyber schemes, fraudsters come up with other attack vectors. many are funded by rogue nation-states, so they have more resources available to them than we do.<\/p>\n

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however, this doesn\u2019t mean that you can give up and let them run rampant. doing so leaves you vulnerable to litigation in the event of a data breach, and possible business disruption from ransomware.<\/p>\n

<\/p>\n

the bottom line is that the fraudsters have figured out that your firm has a treasure trove of taxpayer information. additionally, they\u2019ve realized that small tax firms aren\u2019t as sophisticated and often don\u2019t have strong cybersecurity measures in place. you must take steps to protect your firm and your clients.<\/p>\n

understanding the cost of a data breach
\n<\/strong><\/p>\n

dealing with a data breach includes both direct costs and indirect costs. direct costs include those costs that you incur to investigate the data breach, minimize the consequences of the data breach and assist victims (your clients) in protecting themselves from potential fraud.<\/p>\n

sometimes when i present at conferences about the cost of the data breach, the question comes up: \u201cwell, i have cyber-liability insurance. won\u2019t that cover everything? do i need to worry about these costs?\u201d the answer is yes. you still need to worry about these costs. the reason for this is that cyber-liability insurance will often cover the direct costs, but it doesn\u2019t cover the indirect costs.<\/p>\n

and indirect costs often have a much greater impact \u2013 especially for smaller firms.<\/p>\n

these include lost time of your staff and yourself in dealing with notifying customers and their resulting inquiries, time spent working with investigators and authorities, time responding to regulators and others who are ensuring the appropriateness of your response to the data breach, and also the potential loss of current and prospective clients. these indirect activities and costs can often be much more disruptive for small firms because firms are already stretched thin in staffing, and now you have to deal with the data breach plus continue normal operations. this is even worse if the data breach is discovered during busy season.<\/p>\n

what triggers a data breach?
\n<\/strong><\/p>\n

generally, when there is unauthorized access to personally identifiable information (pii), a data breach is considered to have happened. originally pii was only defined as:<\/p>\n