In today’s threat landscape, the question isn't whether you'll face a disaster, but when. Natural disasters, ransomware attacks, cloud service outages, and data breaches are no longer anomalies but standard business risks. Yet, many organizations remain unprepared, which is making recovery costs skyrocket. 

According to the 2025 Global Assessment Report (GAR) on Disaster Risk Reduction, the global cost of disasters annually now exceeds $2.3 trillion when factoring in indirect costs. These indirect costs include cascading effects of a disaster, such as lost customers, regulatory fines, stalled growth, and reputational damage. 

Understanding how much disaster recovery actually costs, and how much of that cost is avoidable through planning, is a critical first step in reducing financial risk.

How much does disaster recovery cost?

When people ask, “How much does disaster recovery cost?” they’re usually thinking about the costs of fixing things after something breaks: the cleanup after a flood, getting systems back online after an AWS outage, or recovering data lost or compromised during a cyber attack.

These are reactive, unpredictable expenses that vary widely based on company size, industry, geography, and the nature of the incident. While exact figures differ, recent data provides a sobering baseline.

For example, in a 2025 survey conducted by Cockroach Labs, 100% of technology companies surveyed experienced revenue losses from outages related to disaster events in the past 12 months. On average, organizations experienced 86 outages over this time period, with losses ranging from at least $10,000 to well over $1 million per outage. That puts total losses between $86,000 to $86 million per year for the average tech organization. 

Research into ransomware incidents between 2018 and 2024 shows that government entities experienced nearly 28 days of downtime per attack, with each day costing approximately $83,600. That puts the average recovery cost at $2.3 million per incident. Healthcare organizations fare worse, losing nearly $900,000 per day, while manufacturers lose up to $1.9 million per day of downtime.

Data breaches are another common disaster event that cost all organizations millions, but hit certain sectors and regions harder. IBM’s 2025 Cost of a Data Breach report found that:

• Average breach costs reached $4.4 million globally, with 86% of organizations experiencing operational disruption
• U.S. breach costs climbed to a record $10.22 million, driven by higher regulatory fines and escalation costs
• Healthcare reported the highest average breach cost for the 14th consecutive year, at $7.42 million

These figures reflect far more than lost uptime. They include lost business, emergency response efforts, legal and regulatory obligations, and customer notification costs.

To understand the true cost of disaster recovery, you have to account for everything that breaks once a disaster occurs. Let’s take a closer look at all disaster recovery costs, including direct and indirect.

Direct vs indirect disaster recovery costs 

When calculating the total cost of disaster recovery, it’s easy to focus solely on downtime or other immediate costs. However, the direct costs of a disaster are often just the tip of the iceberg. Indirect costs are harder to quantify but often more devastating.

The GAR’s 2025 report estimates that direct disaster costs account for more than $200 billion per year and indirect disaster costs account for over $2 trillion in losses annually worldwide.

Let’s look at examples of these different types of disaster recovery costs below.

Direct disaster recovery costs

Direct costs are the immediate, out-of-pocket expenses required to restore systems and resume operations. These commonly include:

• Infrastructure and licensing: Emergency cloud resources, replication tools, backup services, and software licenses required during recovery.
• Labor and consulting fees: Overtime for internal teams and premium rates for third-party responders brought in during active incidents.
• Hardware and equipment replacement: Emergency procurement of servers, networking equipment, or facilities repairs following physical damage.
• Compliance penalties: Fines from regulatory bodies if a disaster event or recovery involves non-compliance, like failing to send out breach notifications in a timely manner (a common HIPAA violation). Nearly 48% of organizations that suffered a breach paid $100,000 or more in regulatory fines, according to IBM’s 2025 report.

Indirect disaster recovery costs

Indirect costs are the cascading effects of a disaster. These less visible, but often more damaging, costs typically include:

• Lost productivity and employee burnout: System outages prevent work, create backlogs, and force extended recovery hours. Cockroach Labs reports that outages caused missed deadlines (39%), work backlogs (43%), and overtime or weekend work (48%), driving burnout and turnover. 
• Customer churn and reputational damage: A major disaster and outage often results in significant reputational damage and customer attrition. Organizations estimated that a breach cost them $1.38 million in lost business (including revenue from system downtime, lost customers and reputation damage) in IBM’s 2025 report. 
• Opportunity cost: Recovery efforts pull resources away from product development, expansion, and innovation — delaying growth and competitive advantage.
• Audit and legal consequences:Incidents frequently trigger regulatory investigations, breach notifications, and audits. 44% of technology executives report losing sleep over downtime-related fines, spiking to 85% among EMEA leaders in Cockroach Labs’ latest report. 

How much does a disaster recovery plan cost?

The most effective way to reduce disaster recovery costs? Preparation.

Organizations that have a well-designed and tested disaster recovery plan in place shift spending away from emergency response and toward predictable, controllable operating expenses. This dramatically reduces downtime, data loss, and the cascading impacts and costs of disasters while improving cloud data security and regulatory compliance.

So what does disaster recovery planning actually cost?

Here are some key cost factors:

1. Disaster Recovery as a Service (DRaaS) cost

Many organizations now outsource disaster recovery rather than managing it entirely in-house, which saves them the upfront and ongoing operating costs of building and maintaining disaster recovery infrastructure (including labour, connectivity, power, software, and even a data center sometimes).

Most DRaaS providers have a subscription-based pricing model and bill monthly or annually, which means customers have predictable, recurring costs rather than the large and less predictable capital expenses of managing DR in-house.

The cost of DRaaS typically scales by organization size, number of users, amount of storage, data volume and complexity, and other factors we’ll discuss below. But to get a sense, Zmanda estimates the typical costs for different organization sizes as:

• Small (100-500 employees): $30,000-75,000 annually
• Mid-sized (500-2000 employees): $75,000-150,000 annually
• Large (2000+ employees): $150,000-300,000+ annually

2. Cloud-based disaster recovery cost

Organizations using public cloud service providers may choose to design and implement a DR plan themselves, rather than outsource to a MSP/MSSP, using the products and features offered by their CSP. Like DRaaS providers, these cloud-based disaster recovery services are often consumption-based and billed monthly or annually.

They include services that run on a regular basis as well as services that are triggered during a disaster, such as:

• Managed replication and failover: If a physical server or virtual machine goes down, your CSP can replicate the instance so you can fail back the replication to another site you own or to the cloud, often in one click. This is typically billed as a flat monthly fee per physical server or virtual machine. Azure’s pricing ranges from $16-25 per instance per month, for example.
• Storage: Upon failover during a real disaster or disaster recovery drills, your CSP stores replicated data. This overall cost varies based on replica of storage and the number of disaster recovery drills conducted in a year and is often billed per GB per month. However, the total cost is typically not just based on the amount of data stored but also the storage tier. For example, Azure Blob Storage has a “hot” tier for frequent data reads and writes for near instant recovery at $0.18 per GB and then colder tiers for less frequently accessed data, like long-term backups, for as little as $0.002 per GB.
• Data egress fees: These fees are incurred by data transfers from one cloud region to another or out of the cloud, like when you restore a replicated server or VM to your own on-premises site. They typically start at $0.01 per GB, but can increase due to various factors, like if the data is transferred across regions. For example, Azure charges $0.02 per GB for intra-continental transfers in North America.

So how might all these costs add up per month for an organization? In total, Infrasist estimates that a typical environment with 50 virtual machines would cost between $3,300 and $5,000 per month with Azure Site Recovery.

3. Recovery objectives

Recovery objectives are another major factor that affect the cost of DR planning. Typically, the smaller these metrics are, the faster your application must recover from a disaster and the higher the cost. 

Recovery Time Objective (RTO)

RTO is the maximum amount of time your business can be offline after a disaster. Here are the two extremes that typically set the cost range:

• Near-Zero RTO (Instant Failover): For businesses that need to be back online asap. Most expensive. Typically requires "hot" standby servers that are always running.
• 24-Hour RTO: For businesses that need to be back online within 24 hours of an outage. Least expensive. Relies on restoring from backups, which takes longer.

Recovery Point Objective (RPO)

RPO is how much data loss you can tolerate (e.g., "we can lose 4 hours of data"). Like RTO, this metric significantly affects the cost of disaster recovery planning. Here are two examples that typically set the range:

• Continuous Data Protection (CDP): Syncs data in real-time. High cost due to constant bandwidth and specialized software.
• Daily Backups: Lower cost, but higher risk of losing a full day's work.

4. Testing and maintenance

A plan that isn't tested is just a piece of paper. That means you must budget for testing as well as other ongoing maintenance costs, like:

• Simulated Drills: Testing recovery scenarios, like a test in which your usual access path to Google Cloud doesn't work or a tabletop exercise, may involve cloud-based fees, labor costs for engineers, leadership resources and time, and penetration test costs.
• Test or Actual Failover Compute: Most cloud providers keep replicas of your virtual machines ready for immediate failover during a disaster, but not running. They do boot up when an actual failover occurs or you’re running a failover test, so most CSPs charge compute fees for the duration of a failover (either actual or test).

Disaster recovery plan template

Creating a disaster recovery plan from scratch can be overwhelming. We created the template below so you can easily kickstart disaster recovery planning and customize it based on your organization's unique risk appetite, recovery strategies, and operational priorities.

How compliance can help reduce disaster recovery costs

Disaster recovery planning isn’t just a best practice. It’s embedded in nearly every major regulatory and commercial framework. Meeting these framework requirements forces organizations to document, test, and continuously monitor their controls and environment, which improves resilience and dramatically lowers recovery costs when incidents do occur.

Here are some cybersecurity frameworks that incorporate disaster recovery-related requirements:

• NIST 800-53: Requires a dedicated "Contingency Planning" (CP) family of controls. This includes CP-6 (Alternate Storage Sites) and CP-7 (Alternate Processing Sites), ensuring you can resume mission-essential functions within a defined period.
• ISO 27001: Annex A control 5.29 requires organizations to plan how to maintain information security at an appropriate level during disruption by creating and testing a Disaster Recovery Plan and cyber incident response plan and 7.5 mandates protection against physical and environmental threats like natural disasters.
• HIPAA: Requires a formal Disaster Recovery Plan (164.308(a)(7)(ii)(B)) to ensure the restoration of any loss of PHI (Protected Health Information).
• SOC 2: Under the Common Criteria (CC7.2), entities must monitor for anomalies indicative of natural disasters that affect their ability to meet service objectives.
• Digital Operational Resilience Act (DORA): DORA requires organizations to prove they can withstand, respond to, and recover from disruptions through mandatory ICT business continuity and disaster recovery plans and regular resilience testing.
• NIS2 Directive: Under NIS2, a much broader range of “essential” and “important” entities must implement business continuity, backup, and disaster recovery measures, ensure the ability to restore operations quickly after incidents, and demonstrate governance and accountability around resilience planning

How Secureframe can help reduce disaster recovery costs

The cost of disaster recovery in 2026 is no longer limited to infrastructure rebuilds or IT overtime. It includes prolonged downtime, regulatory fines, lost customers, stalled growth, and reputational damage that can take years to undo.

What separates high-cost disasters from manageable disruptions is rarely luck, but preparation.

Organizations that proactively invest in disaster recovery planning transform unpredictable recovery costs into controlled, budgeted operating expenses. This involves:

• defining realistic RTOs and RPOs
• testing recovery procedures before a crisis hits
• aligning recovery processes and procedures with compliance frameworks that emphasize resilience

As regulations like HIPAA, SOC 2, DORA, and NIS2 continue to raise expectations around availability and continuity, disaster recovery planning is no longer optional. It’s mandatory for strengthening trust with customers, regulators, and partners, and one of the most effective ways to reduce the true cost of disasters.

Secureframe helps organizations operationalize disaster recovery planning as part of a broader compliance and resilience strategy. By mapping disaster recovery requirements across frameworks, centralizing evidence, continuously monitoring your tech infrastructure and controls, and automating other security workflows, Secureframe makes it easier to maintain operational readiness without inflating costs.

Whether you’re formalizing your first disaster recovery plan or aligning recovery controls across multiple frameworks, request a demo to learn how Secureframe can help you move from reactive recovery to proactive resilience.