Compliance Penalties and Legal Costs

Regulatory compliance failures during DDoS attacks trigger substantial penalties. Financial services face fines for service availability violations under regulations like MiFID II. Healthcare providers risk HIPAA penalties if attacks prevent access to critical systems. GDPR includes availability requirements with potential fines reaching 4% of global revenue.

Legal costs accumulate through multiple channels following attacks. Customer lawsuits seeking damages for service unavailability require expensive defense. Class action suits for SLA violations demand settlements. Shareholder lawsuits alleging inadequate security preparations add corporate liability. Legal defense costs average $250,000-$1 million for significant incidents.

Insurance claims processing generates additional expenses. Cyber insurance policies require extensive documentation of attacks and losses. Deductibles often reach $100,000-$500,000 before coverage begins. Premium increases following claims can double or triple annual costs. Some insurers drop coverage entirely after multiple incidents.

Contractual penalties from SLA violations create immediate financial obligations. Enterprise contracts include availability requirements with automatic credits or penalties. Missing availability targets triggers cascading penalties across customer base. Large service providers report SLA credits exceeding $10 million for major outages.