data breaches represented by an abstract image of a person in the center of a matrix of binary numbers holding up a data card with a picture of an old-fashioned padlock on it

Poor Security Can Lead to Data Breaches and Legal Peril

Companies have increasingly found themselves victims of large data breaches. Unfortunately, this is expensive for the company and often risky for the consumer. This makes a data breach both costly and an opportunity for lawsuits.

Insufficient security measures increase your risk of a severe data breach. Moreover, having poor data security will not help you during any legal proceedings, especially considering the growing body of laws designed to protect consumer data.

With all this in mind, it’s important to invest in good data security for your organization. Data security solutions are important for monitoring your environment. They also address remote and local workers’ access permissions and protect you from data loss. You may not be able to avoid a successful attack entirely, but you can minimize the damage and recover quickly.

Data Breaches Are a Major Problem

According to Ponemon’s latest report on the cost of a data breach, the average cost to an organization for a data breach was $4.35 million. A critical infrastructure breach cost $4.82 million. Perhaps not surprisingly, 83% of organizations surveyed had experienced multiple data breaches. This statistic alone suggests that breaches are becoming both more common and more persistent. Although the organizations had presumably made efforts to improve their security, attackers were still able to break through.

This is a problem for both companies and consumers. For companies, data breaches can be expensive and reputation-damaging, as well as frustrating for security teams. For consumers whose data is exposed, there can be more problematic ramifications including identity theft, account compromise, and credit damage. The costs of identity monitoring and the frustration of having to overhaul account credentials can sometimes leave consumers feeling (understandably) litigious.

Security Week reports that although the number of successful ransomware attacks decreased in 2022, the amount that companies paid the attackers was substantially higher. Moreover, tracking down the attackers is becoming increasingly difficult. Additionally, companies have found that notifying customers of a data breach is increasingly correlated with one of those customers filing a lawsuit. In 2018, 394 of disclosed incidents resulted in 4 lawsuits. In 2022, 494 incidents resulted in 42 lawsuits. This is an increase from 1.5% of disclosures resulting in a lawsuit to 8.5%.

Even if your organization experiences only a minor incident, there is a risk of legal action. Four lawsuits filed last year concerned data breaches that affected fewer than 1,000 people. Another 14 concerned breaches that affected between 1,000 and 100,000 people. These numbers may seem high, but consider the number of customers or users who interact with your website or applications. The average small or medium-sized business hits roughly 10,000 visits per month, and larger organizations rack up even more.

Given the privacy laws that have recently been implemented, like the GDPR and CCPA, there is an increased likelihood that your organization will be found at fault for the breach. Statistics show, for example, that 91% of companies across industries are unprepared for the GDPR and CCPA. This means they are almost certainly out of compliance with some of its requirements. In addition to potentially paying a settlement and legal fees, your organization could also be on the hook for fines. Almost 1,500 GDPR fines have cost violators $2.5 billion, for example.


Reduce the Risk of Breaches by Implementing Strong Security Solutions

While it is impossible to completely eliminate your risk of a data breach, you can reduce your risk by implementing strong security solutions that monitor your security environment for suspicious activity. A quick discovery and short reaction time go a long way toward minimizing the damage done by a breach. Additionally, an attacker accessing less data means fewer of your customers are affected.

To minimize your risk of attack, breach, and later legal action, implement data security solutions that address remote work and BYOD, which increase the cost of a breach by an average of $550,000. Use strong access controls and limit access to data based on whether the person needs that access regularly for work. If they do not, do not provide access. Use encryption for all of your files, and back up everything frequently. Be sure to check your backups periodically to ensure they are running properly and that you can successfully download them.



A data breach isn’t good for anyone, but due to its often detrimental effects on consumer finances, a breach at your company can result in a lawsuit. Protecting yourself and your organization from data breaches will save you money on both the data breach and the legal costs you might incur. Therefore, investing in good data security solutions is a good idea. Although they won’t protect you from every incident, they can decrease your risk and mitigate the damage following a successful breach.