A data breach is when sensitive, confidential, or protected information is accessed, disclosed, or stolen without authorisation. The data can include personal information, financial records, intellectual property, medical history, or other critical information. The consequences of a data breach are long-term and financially draining for the victim companies. Let's discuss cybersecurity incidents in detail.
How Data Breaches Expose Sensitive or Confidential Information?
Data breaches compromise the integrity and confidentiality of sensitive information. They expose individuals and organisations to unauthorised entities who misuse data to extract money or commit financial fraud. For example, in 2024, 46% of data breaches involved compromising personally identifiable information, including tax identification numbers, email addresses, and home addresses. One report revealed that the average cost of a data breach was $4.88 million in 2024.
How Do Data Breaches Happen?
Data breaches occur through various vulnerabilities, exposing sensitive information to unauthorised access. Understanding these threats is vital to safeguarding organisations from potential risks. Some of the most common causes of data breaches include:
Hacking and Cyberattacks
Scammers exploit software, networks, or systems' vulnerabilities to gain unauthorised access to sensitive data. They use malware, ransomware, or denial-of-service (DoS) tactics to cause financial or moral harm to the user.Â
They can also use advanced persistent threats (APTs) to infiltrate systems and steal data without being noticed for long periods.
Phishing Attacks
In phishing attacks, scammers trick employees into revealing sensitive information, like login credentials or financial data, through deceptive emails or messages.
For example, your employee may receive an email from the HR department urging them to update payroll details via a provided link. The link leads to a fake website mimicking the company's portal.
Insider Threats
An insider threat occurs when an employee, contractor, or business partner intentionally or unintentionally misuses their access to harm the company. For example, a software engineer in your tech firm steals and sells confidential data to a competitor.Â
Since they already have system access, their actions go unnoticed until significant losses occur. Insider threats can be intentional or accidental but always pose serious risks.
Physical Theft
As the name implies, this breach occurs when someone breaks into your office and steals your company's official laptop, USB drive, or hard drive that holds sensitive data. If the stolen data is not encrypted, it can easily be accessed and misused against your company.
Unsecured Networks
Using an unsecured network allows scammers to intercept data or gain access to connected devices easily. For example, if you use public Wi-Fi to carry out any official or personal task, a scammer using the packet sniffing method can capture unencrypted data packets travelling over the network to extract your login credentials or credit card details.
Types of Data Breaches
Data breaches are classified into the following five types:
Personal Data Breach: Scammers steal personal details like name, address, phone number, and Aadhaar number.
Financial Data Breach: It involves the theft of banking details, credit card numbers, or digital payment credentials.
Health Data Breach: This type of breach can result in the leak of sensitive medical records, insurance details, and patient history. It can also result in identity theft or discrimination based on medical conditions.
Intellectual Property Breach: Hackers steal confidential business information, trade secrets, and research data.
Credential Breach: This involves the compromise of usernames, passwords, and security codes of employees/administration.
Impact of Data Breaches
Data breaches have lasting impacts, highlighting the need for strong cybersecurity to protect businesses and individuals. Here are some of the most common and damaging consequences businesses may face:
Financial Losses
After a data breach, companies face hefty legal fees, regulatory penalties, and incident response costs. Past data indicates that, on average, companies incurred a loss of ₹176 million in the financial year 2021–22.
Moreover, if the breach has impacted customers, the company has to compensate them. Last but not least, a major amount is spent on improving security systems to prevent future breaches.
Reputation Damage
Studies reveal that around 65% of customers lose trust in a company when they come to know about a data breach. Not only that, but negative media coverage can make things worse, leading to lost customers, lower sales, and even business partnerships falling apart. Also, in such scenarios, competitors gain an edge.
Operational Disruption
Following a security breach, the company may be required to shut down its networks to contain the incident. This leads to operational downtime and a significant loss in productivity. Critical functions such as payment processing and customer support may come to a halt, while employees could face restricted access to essential files, disrupting the continuity of business operations.
In 2024, one report shows that the average time it took to investigate the breach, fix security gaps, and restore data was around 7.3 months.Â
Legal Consequences
If sensitive customer or business information is exposed, your company may face fines and penalties for failing to protect data, especially under laws like the GDPR or India’s Data Protection Act.
Identity Theft and Fraud
As discussed, data breaches can lead to identity theft and fraud. In 2025, the FTC (Federal Trade Commission) received 1.4 million identity theft reports, with total losses estimated at $10.2 billion.Â
How to Prevent Data Breaches?
Implementing these preventive measures majorly reduces the risk of data breaches, safeguarding sensitive information and maintaining trust in today's increasingly connected digital environment.
1. Strong Password Policies
Always have complex passwords that have uppercase and lowercase letters, numbers, and special characters. Make sure the password is hard to guess and that you are updating it regularly.Â
2. Encryption and Access Controls
Encryption converts sensitive data into unreadable formats to prevent unauthorised access, even if the data is stolen. Use role-based access controls (RBAC) to ensure your employees can access only the data necessary for their roles. You must also use secure file-sharing protocols and encrypt communication channels.
3. Employee Training
Employees are often the weakest link in cybersecurity. Train them regularly on how they can recognise phishing emails and how to handle sensitive data. Simulated cyberattack drills help employees understand real threats and act accordingly.
4. Regular Security Audits
Conduct routine security audits to identify vulnerabilities in your system. You can conduct penetration testing, vulnerability assessments, and software updates. Also, keep an updated inventory of all digital assets, as it will help monitor security risks.
5. Multi-Factor Authentication (MFA)
MFA adds an extra layer of security by requiring users to verify their identity through multiple methods, such as passwords, biometrics, or one-time codes. Even if an attacker steals a password, they cannot access the system without the second authentication factor.
Examples of Data BreachÂ
India has witnessed several data breaches in recent years. Here are a few data breach examples:
Healthcare Sector BreachÂ
In 2022, one of the major healthcare institutions in India became a victim of a cyberattack. The incident resulted in the leakage of patient names, contact details, and medical histories of over 3.5 million patients.Â
e-Commerce Platform BreachÂ
In 2023, a noted e-commerce platform in India experienced a data breach that affected approximately 20 million users. The leaked data included email addresses, hashed passwords, and transaction details.
Role of Cyber Insurance in Managing Data Breach Risks
Cyber insurance is crucial to shield your company from the financial risks associated with a data breach. Here are some common reasons:
Covers financial losses
Cyber insurance helps your business recover from financial losses caused by data breaches. It covers costs related to investigating the breach, compensating affected customers, and legal expenses. For example, if your company faces a ransomware attack, cyber insurance can cover the costs of restoring data, investigating the breach, and recovering operations.
Access to legal and technical expertise
Cyber insurance policies include access to legal advisors and technical experts who assist in managing the aftermath of a breach. These professionals help with forensic investigations, compliance with regulations, and public relations to minimise reputational damage.
Supports customer notification
Suppose you run an e-commerce platform, and it suffers a breach, exposing customer payment details. Cyber insurance can fund customer notifications and credit monitoring services. This coverage can help your business rebuild trust and prevent identity theft-related damages.
Conclusion
Considering the growing number of data breaches, you, as a business owner, must take a proactive approach to cybersecurity. You must implement strong security measures like encryption, multi-factor authentication, and regular security audits.Â
You must also invest in comprehensive cyber insurance policies so that, even if a breach occurs, the right coverage helps you navigate financial losses, legal liabilities, and recovery costs.
To find a suitable plan, explore options on Policybazaar for Business. Alternatively, connect with our risk consultants - they can help you choose the most suitable coverage for your needs.
Disclaimer: Above mentioned insurers are arranged in alphabetical order. Policybazaar.com does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.
Global Cyber Threats: India Emerges as a Key Target in 2024
According to a report by cyber intelligence firm CloudSEK, India ranked as one of the top nations globally affected by cyberattacks in 2024, with 95...Read more
Payment Gateway Company Reports Massive ₹16,180 Crore Cyber Theft
In a startling revelation, the Thane Police have exposed a massive cyber heist, with cybercriminals pilfering an astonishing ₹16,180 crore. This...Read more
Cybercriminals Target Former Union Minister Dayanidhi Maran's Savings...
In a concerning development, cybercriminals managed to siphon off ₹99,999 from the personal savings account of Dayanidhi Maran, the former Union...Read more
Mumbai Police Nab Four Cyber Fraudsters in Extensive 22-Day Operation
In a 22-day operation spanning four states, including Uttar Pradesh, Rajasthan, Delhi and Madhya Pradesh, a Mumbai Police task force comprising seven...Read more
India Grapples with Mounting Cybersecurity Risks, According to Palo...
India is confronting a significant threat of cyberattacks aimed at its critical infrastructure, public sector, and essential services, as per a report...Read more
Pune-Based Engineering Supplies Firm Loses Over 22 Lakh in Cyber Scam
Pune City police uncovered a suspected 'man-in-the-middle' cyber attack that cost a Pune-based engineering supplies firm more than 24,000 Euros...Read more
AIIMS Delhi Hit by Cyber Attack for Second Time in a Year
All India Institute of Medical Sciences (AIIMS) in New Delhi faced a new cyberattack on Monday. The premier medical institution promptly responded...Read more
Mumbai Woman Falls Victim to Cyber Fraudsters While Helping an...
A Mumbai woman's act of kindness towards an injured bird took an unexpected turn when she became a target of cyber fraud.Dhwani Mehta works at Famous...Read more
Scammers Exploit 'Man-in-the-Middle' Technique, Pune Construction...
Prominent Construction Technology Company falls victim to cyber attack, losing Rs 13.8 Lakh in Pune, India. The investigators described it as a...Read more
Reddit Hacked in a Targeted Phishing Attack
Finance minister Nirmala Sitharaman presented the Union Budget FY 2023 on February 1, 2023. Christopher Slowe, CTO of Reddit, revealed the company was...Read more
FM Nirmala Sitharaman announces Set up of 3 Artificial Intelligence...
Finance minister Nirmala Sitharaman presented the Union Budget FY 2023 on February 1, 2023. The Finance Minister announced the establishment of 3...Read more
Cyber Fraudster Target Customer under Disguise of Insurance Officer
Cyber fraudsters are targeting customers under the disguise of not a bank official but an insurance company official. In one such event, a 67 year old...Read more
Sensitive Data of 6 Lakh Indians Stolen by Hackers and Sold at Rs...
Out of 5 million people globally, 6 lakhs Indians have had their sensitive data stolen and sold on the bot market making India, the worst affected...Read more
AIIMS Cyber Breach: Attackers Demand Rs 200 Crore in Crypto
All India Institute of Medical Sciences, New Delhi, India reported a cyberattack on November 23, 2022. Later, the statement released by AIIMS said that...Read more
Cyber Criminals Sending Phishing Links to Twitter Users
Cyber criminals are targeting twitter Verified Twitter user by sending them phishing links. The cyber criminals send the phishing link to steal their...Read more
The representatives at PolicyBazaar were knowledgeable, patient and genuinely committed to helping me find the best insurance policy for my requirements. They took the time to answer all my questions and provide valuable guidance, ensuring that I had a thorough understanding of the coverage details and terms. THANKS.
Agra
4.3 October 06, 2022
Amit
Quick And Hassle Free
After seeing a rise in cyber attacks in many of the companies, i decided to purchase a cyber insurance policy for my start up. I went on the Policy Bazaar website and learned about the coverage in detail and purchased it from their website only. It was quick and hassle-free purchase.
Nashik
4.5 October 04, 2022
Pinku
Paperless Process
We bought the contractual liability insurance from policybazaar and received the best overall package. The process was paperless as we applied for insurance online and the support was amazing.
Surat
4.5 October 03, 2022
Aashish
Extensive Coverage
We thoroughly checked all the benefits and features and decided to buy a contractual liability policy from Policybazaar. It provides all the necessary features to safeguard our business against any loss.
Ahemdabad
4.5 October 02, 2022
Nishant
Easy To Buy
It was easy to buy insurance from Policybazaar and customer support was also amazing to clear all the doubts. Contractual liability insurance is essential for my business and I could not get a better deal than this.
Udaipur
4.5 October 01, 2022
Puneet
Easy Plan Comparision
An ideal Contractual Liability Insurance policy purchased to protect our business that we ecounter in our everyday operations. Policybazaar offers a platform to compare multiple plans.
Assam
4.5 September 30, 2022
Govind
No Broker And Paper Work
Great experience at Policybazaar. We did not know that buying Contractual Liability Insurance could be that easy. Also there is no broker and paperwork.
Jharkhand
4.8 September 29, 2022
Rinku
Perfect Insurance Coverage
I purchased Contractual Liability Insurance from Policybazaar and the coverage they provided is perfect to keep my hardware business safe various unforeseen instances.
New Delhi
4.5 March 18, 2022
Ishan
Cloud Storage Cover
I wanted to purchase a cyber insurance policy could provide coverage for the data stored in cloud network. I went on the Policybazaar website and look up for plans that would provide me with this coverage. I compared different plans and in a matter of minutes i found the right cyber insurance plan that would fit my requirement.
Ajmer
4.5 March 17, 2022
Anurag
Good User Interface
I was looking for a cyber insurance policy online. After looking for the insurance plan online I landed on the Policybazaar website. Trust me, the user interface of the website is so good that i was able to locate the cyber insurance plan and purchase it in not more than 10 minutes. Thanks Policybazaar.
+Premium varies on the basis of Occupancy, Business Activity & Coverage Type By clicking on "View Plans" you agree to our Privacy Policy and Terms Of Use and also provide us a formal mandate to represent you to the insurer and communicate to you the grant of a cover. The details of insurance coverage, inclusions and exclusions are subject to change as per solutions offered by insurance providers. The content has been curated based on the general practices in the industry. Policybazaar is not responsible for the factual correctness of these details.
Ab suraksha aur bachat ek sath
Compare & Save up to 85%+
Premium starting from
@ ₹890/year+
Get an expert advise
Wait!!Affordable Cyber protection is just a click away!
Get ₹5 Cr cover starting
@ ₹4.13L/year+
Ransomware
Data breaches
Multimedia liability
Breach costs
Get an expert advise
Suno!Apki dukaan ki suraksha, bas ek step door!
Get ₹50L cover starting
@ ₹3500/year+
Get an expert advise
Just a moment!
1 oversight can result in costly lawsuits
Get ₹1 Cr cover starting
@ ₹2500/year+
Get an expert advise
Can your business afford to rebuild after a fire?
Compare & Save up to _ _%*
Get ₹50 Lakh cover starting
@ Just ₹3,400/year
Repair costs
Fire damages
Replacement costs
Natural disasters
Get an expert advise
Hey! Leaving already?
If you are confused about Liability Insurance,
we can help you out.
Find about coverages, benefits and savings..
Hold on!Before you sail away..Compare plans & save upto
Protect your goods from
Theft or malicious damage
Collision or fire accident
Loss while loading & unloading
Your call has been scheduled successfully.
Expert advice made easy
Date
Time
When do you want a call back?
Today
Tomorrow
25 May
26 May
27 May
28 May
29 May
What will be the suitable time?
11:00am - 12:00pm
12:00pm - 01:00pm
01:00pm - 02:00pm
02:00pm - 03:00pm
03:00pm - 04:00pm
04:00pm - 05:00pm
05:00pm - 06:00pm
Tell us the number you want us to call on
Your privacy matters. We wont spam you
Call scheduled successfully!
Our experts will reach out to you on Today between
2:00 PM - 3:00 PM
Expert advice made easy
