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share cyber-threat information with the federal government. The idea is to alert theDepartment of Homeland Security quickly when private companies are hacked sofederal law enforcement officials can help stop cyber criminals from striking again.Notification requirements pose one of the greatest financial burdens to industry. In April2012, the Congressional Research Service noted that in response to notification laws,the compromise of over 535 million records had been disclosed by data brokers,businesses, retailers, educational institutions, government and military agencies,healthcare providers, financial institutions, nonprofits, utilities, and Internet basedbusinesses. Since that time, the number of compromised records and resultingnotifications have increased exponentially.The average response cost for each record compromised by a data breach is roughly$200. Multiply that times tens or hundreds of thousands of records and this cost maythreaten not only the bottom line, but the health and viability of your business.III.Planning for the Expense of a Security Breaches/Cyber AttacksCompanies are becoming increasingly focused on identifying and preventing securitybreaches on the front end, however, there remains some lag with regard to respondingto the inevitable security breach. The good news is that in 2014 U.S. companies’perceptions of the cyber risks had increased at a faster pace than actual reported cyberevents. 10In 2013, 61percent of companies had a breach response plan in place that10 http://download.pwc.com/ie/pubs/2014_global_economic_crime_survey.pdf