When it comes to cyber attacks, inaction is equal to the power of evil intent: according to the Ponemon Institute, negligence causes 39 percent, and criminal attacks cause 37 percent, of all data breaches.

On the other hand, organizational readiness to tackle emerging cyber risks is paying off. While the cost of a data breach to companies increased by about 7 percent from 2008 to 2010, it decreased by 24 percent—from $7.2 million to $5.5 million—from 2010 to 2011. Damages include lost business, diminished customer trust and resources put towards credit report monitoring.

“Companies have improved steps taken in both preparing for and responding to a data breach,” writes Robert Hartwig, economist and president of the Insurance Information Institute (I.I.I.).

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