Third Party Risk Downtime Cost Estimator

1. Estimate outage duration
Enter the number of hours the affected process is unavailable or materially degraded.

2. Enter hourly business loss
Use lost revenue or contribution associated with the blocked process.

3. Count affected employees
Include only people who cannot perform productive alternate work.

4. Set loaded labor cost
Enter wages plus relevant employer costs per employee-hour.

5. Add exceptional costs
Include response, vendor, communications, workaround, and recovery expenses not captured elsewhere.

6. Review the components
Use the breakdown to see whether business loss, labor, or extra costs drive the estimate.

Lost revenue = Downtime hours × Revenue lost per hour Idle labor = Downtime hours × Affected employees × Labor cost per hour Total downtime cost = Lost revenue + Idle labor + Extra costs

Use contribution margin rather than gross revenue when that better reflects the economic loss. Extra costs may include emergency support, communications, temporary services, or recovery fees.

What the result means

The displayed value is a scenario estimate for a third-party outage. Use it to compare assumptions and priorities rather than as a guaranteed outcome.

Include only costs attributable to the outage period; long-term customer or regulatory impacts may need a separate model.

Given: 7 downtime hours, $12,000 lost per hour, 85 affected employees at $42 per hour, and $18,000 extra costs.

Calculation: Lost revenue = 7 × $12,000 = $84,000. Idle labor = 7 × 85 × $42 = $24,990. Total = $84,000 + $24,990 + $18,000 = $126,990.

Result: The estimated downtime cost is $126,990.