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5 Hidden Costs of Cyberattacks that C-Levels Should Consider

Published on Jan 31 2022

Cyberattacks are becoming increasingly likely and inevitable, and the number of security incidents has surged in the wake of the pandemic, while the remote work phenomenon is contributing to insecure environments. 

More and more business leaders develop a secure, vigilant, resilient approach to cyber risk and allocate more resources to measuring the business impact of a cyber crisis. 

The global cost of cybercrime is expected to reach $6 trillion by the end of 2021. This figure will increase to $10 trillion by 2025.  

When there is a lack of awareness or business leaders assign low priority to cyber vulnerabilities, expenditure on cybercrime may rise dramatically when an incident occurs, and the cost of these crimes can be crippling, especially for companies without a regular budget for cybersecurity. As more executives and decision-makers realize the value and importance of cybersecurity investments, cyber-budgeting is steadily increasing. 

A recent Deloitte Advisory study elaborates on the depth and duration of cyber incidents in financial terms and provides guidance on estimating both the direct and intangible costs associated with these impact factors 

In this article, we would like to draw the attention of business leaders to the 5 common hidden costs of a cyberattack. 


1. Disruption of operations 

Companies often incur indirect costs from cyberattacks, such as the potential for serious business interruptions, that can result in loss of revenue, in addition to direct financial losses. 

Operations disruption and destruction are highly variable cost categories. It considers losses associated with alterations to normal business operations as well as rebuilding operational capability. This could require repairing equipment and facilities, building temporary infrastructure, diverting resources from one part to another, or enhancing resources to replace temporarily disabled systems.  

Additionally, it could also include losses associated with the inability to supply goods or services. The impact of operational disruption depends on the specifics of each circumstance. 


2. Lost customer relationships 

The loss of client trust is the most serious long-term impact of cyberattacks. It may be difficult to find and quantify how many customers have been lost in the initial period following a security breach. 

Even a single attack on a business can be disastrous. An attack that compromises a customer's financial information, for example, might halt operations or put a company out of business forever.  


3. Lost contract revenue 

Cybercrime can lead to one of the most damaging impacts of contractor distrust since most contractors would not do business with a company that was hacked, particularly if the company failed to protect its customers' data. 

The value of lost contract revenue includes revenue and income losses, as well as opportunities that will be missed because of terminated contracts due to a cyber incident. 


4. Devaluation of trade name 

A brand name relates to a specific business or product, while a trade name relates to an organization. A trade name devaluation is one of the categories of intangible costs. It refers to a reduction in the value of marks, names, or symbols used to distinguish the products of an organization. 

Assessing a trade name can be a challenge. Valuations are based on the "relief from royalty method." To do this, you estimate how much someone else would have to pay you for the right to use your name. Cyberattacks often cause a decrease in the value of a company's trade name after a breach. 


5. Loss of intellectual property 

Cyberattacks are seen as a way of gaining access to customer information. However, in some cases, a breach that compromises a company’s intellectual property may be more valuable. Consider the consequences of having intellectual property stolen or disclosed, such as business ideas, marketing strategies, or growth plans. This breach might render any of these ideas obsolete or ineffective, causing considerable damage to corporate growth and revenue gains, particularly if they get into the hands of your competitors. 



Business leaders, including CFOs usually fail to conduct a genuine assessment of security needs beforehand. Then, it takes a real struggle to recover from the excessive damage that a successful attack can inflict. Even if a company has cyber insurance to mitigate the direct financial risks, a successful attack can still lead to major reputational damage, lost customers and contractors, and noncompliance legal penalties. 


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