In its study - entitled `The 2008 Annual Study: UK Cost of a Data Breach report' - researchers found this average price as up from £1.4 million a year ago, and that each lost customer data record cost firms an average of £60 - up 28 per cent from the 2007 figure of £47.
Proving something that IT managers have suspected from some time, namely that insiders pose a more serious threat than external hackers and malware, PGP says that 70 percent of all cases its researchers uncovered involved insider negligence.
This, says the Ponemon Institute, which carried out the research for PGP, highlights the need for better end-user education.
Thirty percent of incidents, says the report, involved malicious acts, and a third resulted from third-party errors.
"In just the second year of this UK study, research proves that UK businesses continue to pay dearly for a data breach," says Larry Ponemon, founder of The Ponemon Institute.
"As costs continue to rise, companies must remain on guard or face losing valuable customers in this unpredictable economy," he adds.