Jun 8th, 2015
Wondering about the significance of disaster recovery in business? Wonder no more – simply consider the consequences of an unexpected outage. The fact is that insurance coverage helps to give peace of mind – but it doesn’t bring a crashed server back from the dead!
Insurance gives you backup
Monetary compensation is important for the continuity of business finances like cash flow, creditor payments, and other operating expenditure – including the repair costs and procurement of temporary resources. Imagine a service-oriented business losing their client interaction database due to fire. They will not be able to operate for days while the little mishap gets sorted out so the financial impact of this will be offset by a suitable insurance policy.
To illustrate the need for insurance, let’s take a look at the cost of disasters. According to the 2014 Cost of Cyber Crime Study in the United States from the Ponemon Institute at HP, the maximum total annualised cost of successful cyber attacks amounted to over 40 million pounds. These attacks include DoS (denial-of-service) attacks, viruses and other malware.
Aside from the cost of man-made disasters, natural disasters are often more unexpected and more difficult to mitigate. The costs are incurred on a larger scale and usually amount to billions affecting multiple businesses at a time. Sigma No. 1/2014, a 2013 report by Swiss Re on the most expensive natural catastrophes and man-made disasters in since 1970, showed that storm floods in Europe in 1987 cost 44 billion pounds, with a further cost of floods being incurred in 2013 to the value of almost 30 billion pounds.
But recovery planning is your best bet
Most companies recognise the need for some form of investment in information security. Did you know that out of ten factors influencing spending, the second highest of these is on business continuity and disaster recovery (the highest spending being due to protection against economic conditions)? This is according to the Global State of Information Security Survey survey by PwC in 2015.
To highlight some of the risks of not having disaster recovery in place:
Out of the 9600 CEOs, CFOs, CISOs, CIOs, CSOs, vice presidents, and directors of IT in over 115 countries, only 15.98 percent of respondents had experienced zero security incidents during the past 12 months.
34.55 percent regarded current employees as the most likely security threat and 30.42 percent former employees.
Hackers come in third-place at 23.89 percent as a likely cause of a security incident.
A disaster recovery plan that makes use of some form of data backup and instant-recovery mechanism goes a long way in enabling your company to be able to recover from a data security incident – with minimal financial losses. Threats are lurking right under your nose and the risks are no longer unknown. Hundreds of studies and surveys by experts are available for you to make informed decisions to let your business continue should the unthinkable happen.