The world has quickly changed from one where hackers were only the bad guys in Hollywood movies, to one where they are an ever-present threat. No longer can anyone assume or quietly hope that hackers will not get to them. It is now really a question of when it will happen.
When that day comes, will you be ready?
Incidences of data breach at an all-time high. While a data breach may directly target financial information, such as financial accounts or credit card numbers, in many instances customer information is the real target of the theft – think customer name, address, birth date, passwords, social security number, etc.
Of principal concern is the loss suffered from the actual theft of the information. Sometimes overlooked, but perhaps a more long-lasting concern may be the damage to you or your company’s reputation resulting from a data breach. Perhaps surprising to some, reputations can suffer more from one’s response to the breach (whether it is sincere and adequate), than from the actual hack itself.
Without question, adequate preparation is the best tool to combat this risk. Below are some practical questions to ask to assess whether your business is preparedness for a potential cyber-attack.
- Do you have a response plan in place?
- Have you decided which members of your organization will be part of your response team?\
- Do you know who will serve as your company’s spokesperson?
- Have you chosen who will field calls from customers?
- Do you know which experts or consultants you will turn to once the inevitable happens and have you met with them in advance?
- Do you know whether you will alert law enforcement and, if so, which governmental agencies will you call?
- Have you consulted with legal counsel in creating your plan?
- Have you tested your plan?
- How did your company perform when tested?
- Have you looked into cyber-insurance coverage?
These are just a few of the questions to consider when assessing your preparedness. If you are not certain of the answers, or did not even consider these questions, you are likely not as prepared as you should be.
The time has passed when hacked companies are seen by their customers, and the public, as victims. Now, a data breach may expose a company to litigation (in many instances seeking class action liability). Adequate preparation also means thinking about and planning for the legal issues that come with data breach. Careful consideration should be given to legal counsel’s involvement with planning, preparing, and testing before a security breach takes place.
If this information is new or surprising to you, consulting with experts to begin your preparation is a necessary first step. Waiting until the chaos of a breach occurs is simply too late.
Marc P. Jerabek is a partner with expertise in financial services, real estate and business matters. An accomplished litigator, Mr. Jerabek represents financial institutions, mortgage servicers, large and small businesses, and ...
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