If your company stores data and information digitally, you should have a cyber risk management program that addresses prevention, disclosure, crisis management and insurance coverage in the event of a data breach. Good cyber risk management requires the planning and execution of all four of these components.
Develop Strategies to Prevent a Data Breach
Your data breach prevention strategies may include encrypting all devices used by your employees, such as laptops, tablets and smartphones. Encrypting these devices protects against unauthorized access if an employee loses a device or if someone steals one. Cyber liability policies rarely cover unencrypted devices, so make sure you know whether you need to encrypt the devices or not.
Your strategies may also include educating employees about phishing and pharming scams. Remind them not to click on anything that looks suspicious or seems too good to be true.
Analyze your cyber risks from three different perspectives: technology, people and processes. This risk assessment will give you a clear picture of potential holes in your security. Revisit and revise your plan regularly, because new risks arise often, sometimes even daily.
Know Your Disclosure Responsibilities
If you experience a data breach, the law may require you to notify certain people. If your company is publicly traded, guidelines issued by the Securities and Exchange Commission (SEC) make it clear that you must report cyber security incidents to stockholders—even when your company is only at risk of an incident.
The SEC advises timely, comprehensive and accurate disclosure about risks and events that would be important for an investor or client to know. Evaluate what information and how much detail to released.
Notifying a broad base could cause unnecessary concern for those not affected by the breach.
Some extreme cases of a data breach may cause you to go further than just assessing and disclosing the information. You may have to destruct or alter data depending on its sensitivity.
Your Crisis Management and Response Plan
Preparedness is key when developing your cyber risk management program. When you experience a data breach, respond quickly and appropriately. This is where your crisis management and response plan come into play.
Determine when and how the breach occurred, what information was obtained and how many individuals were affected. Then assess the risks you face because of the data breach and how you will mitigate those risks.
While managing a crisis, let your clients know what actions you are taking, but also be sure you’re not disclosing too much information. It’s a delicate balance. Focus on improving future actions—this will restore trust in your stakeholders and clients.
Your in-house lawyers, risk managers and IT department should work together to create and refine your plan. Everyone should be on board and know their responsibilities when a breach happens.
Protect Your Data—and Your Business
Your cyber risk management program should include cyber liability insurance coverage that fits the needs of your business.
Cyber liability insurance specifically addresses the risks that come with using modern technology—risks that other types of business liability coverage simply won’t cover. The level of coverage your business needs depends on your individual operations and can vary depending on your range of exposure.
Your cyber liability insurance policy should fit your unique situation and include the costs of disclosure after a data breach. Contact S.S. Nesbitt & Co., Inc. to learn more about cyber liability insurance and how you can protect your business from a data breach.
This information is abstracted from Zywave’s “Cyber Liability” article.