Data Breaches Are Expensive: BCBS of Tennessee Spends $7 Million in Wake of Breach

It goes without saying that recovering from a data breaches can be a costly endeavor. In fact, the Ponemon Institute just issued its Fourth Annual “US Cost of Data Breach Study,” which shows that the cost of a data breach increased last year to $204 per compromised customer record. The average total cost of a data breach rose from $6.65 million in 2008 to $6.75 million in 2009.

Speaking of a heavy tab to pay, BlueCross BlueShield of Tennessee just announced that it has spent more than $7 million to respond to a security breach that might have compromised members’ personal and health data. In October 2009, 57 hard drives were stolen from a company training facility. The hard drives contained audio and video files with identifying information for up to 500,000 members.

What costs soo much for BCBS? The company had to hire more than 700 contract and BlueCross employees to help determine what data the hard drives contained. The insurer said it might need to spend significantly more money to evaluate the missing data and provide additional identity protection services. Read more from iHealthBeat here.