Navigating the High Cost of a Data Breach
In the first article in this two-part series, we covered the factors that add to the cost of a data breach, the parameters that play a role in increasing or decreasing the cost, and a methodology to calculate the cost of a data security incident.
Is knowing the cost of a breach enough?
We certainly want to mitigate the cost and take urgent steps to navigate the situation.
What is the most important step to take before a data breach
Cybersecurity events are not a question of ‘if’ anymore, but a question of ‘when’. You only have to wait until your business is at the receiving end of a data breach. Therefore, it is not only smart but also cost-saving to plan ahead of time.
Prepare ahead of time with cyber insurance.
The cyber insurance market is expected to triple this year to $7.5 billion by 2020. According to Gartner Research Report, over 70 carriers already offer some cyber coverage ranging from liability coverage to notifying customers about security breaches and confidentiality coverage, also assisting companies with monitoring assistance.
But 2020 will be a significant year of change. As companies such as AIG, Lloyds, and Allianz exclude cyber coverage from their P&C (property and casualty) insurance covers, companies will have to look for specialized cyber insurance policies to mitigate the high costs of cyber incidents.
Digital incidents now cost $200,000 on average. When these incidents happen with small companies, they go out of business. The frequency, as well as the scope of attacks, is increasing.
This is why cyber insurance is a must for businesses of all sizes in all industries.
What are the critical steps to take after a cybersecurity breach
If you already have cyber insurance, handle the coverage layer first. Consider what are your primary concerns- loss of trade secrets, identity theft, breach of confidentiality agreements, or a combination of these.
Perform a cost-benefit analysis of how likely these losses are and how much they might cost you. Get ready to negotiate appropriate cyber insurance coverage and be aware of what your policy covers.
In order to mitigate your costs, determine whether or not you need to go public or notify customers about the breach. This might depend on the nature of the breach and how much data was compromised.
Preserve the evidence of the breach before you go ahead and fix it. Without preserving the proof, you might end up notifying too many people, spending more money than needed, and might even make a public incident out of something that didn’t need to go public.
Next, in order to mitigate or prevent large losses in data breaches, backup your data and systems and work with a business continuity plan. You don’t want the cost of your breach augmented by having to shut down systems or recover data with added expenses after having your entire data wiped out.
Therefore, store backups offline, inaccessible from the primary network infrastructure.
How to prevent massive expenses on data breach
Call the experts. An outsourced cybersecurity team will help you improve your cybersecurity posture so that you have a lesser probability of getting affected by a security breach.
Invest in a cybersecurity partner such as Payatu to develop, implement, test, and revise your incident response plan. Incident response leaders can help you contain an attack, remediate, and recover from it to get your business up and running sooner rather than later.
By improving your cybersecurity posture, you can mitigate and reduce your chances of encountering hackers.
Effective tips for your cybersecurity posture
Think about cybersecurity as a holistic approach instead of disparate activity for infrastructure network, and hardware.
Proactively look for ways someone could hack into your network. Penetration testing helps you do firs what an attacker would, to build the defenses for a stronger and secure business.
Integrate security protocols and paradigms right from the development of your software systems and processes. Don’t think about security as an after-event but as a critical foundational piece.
For more information and consultation, talk to us!