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Managing Data Breaches

Reducing the risk

As with so many other risks, the best way to manage cyber risks like data breaches is to reduce the risk and exposure as much as possible. Reducing the risk protects a business and its customers and clients from having their data compromised while reducing the exposure protects a business from the consequences of data breaches

A cyber liability insurance policy may assist in reducing exposure following a cyber incident. Reducing the risk is best accomplished by implementing the security measures that best suit the business and the type of data being held. Unfortunately, there isn’t a global standard or a solution that suits all organisations.

Regardless of which security measures are chosen, it’s vital that security products and services be continuously monitored and kept up to date. Businesses must also take steps to ensure basic cyber safety practices are implemented. This includes measures like good password practices and employing data encryption where relevant. This won’t create a foolproof system that eliminates the risk of a data breach occurring but it will significantly reduce the risk.

Responding to a data breach

In addition to implementing practices and procedures that prevent data breaches, a good data breach risk management strategy will include guidelines that should be followed in the event a breach does occur. Such guidelines should specify whether IT, PR, legal etc. professionals need to be engaged and should also cover protocols for:

  1. Containing a breach and limiting further damage including protocols for shutting down and preventing further access to a system that has been breached
  2. Assessing the risks associated with and impacts of a breach including the impacts on the business, such as whether compromised data will affect other business processes or relationships with third parties, and the impacts on the business’s customers, such as the number of people affected and the nature of the data that was compromised
  3. Reporting a breach who needs to be notified, when and how they should be notified and what information they need to be given
  4. Rectifying a breach including procedures for attempting to recover lost data and restarting compromised systems
  5. Assessing the effectiveness of the response and preventing future breaches including protocols for: determining whether criminal activity, human error or inadequate procedures contributed to the breach; evaluating any operational, policy, resource, employee or management issues that arose during the response to a breach; and modifying any procedures or behaviours that contributed to the breach

Summary

Managing cyber risks like data breaches requires an integrated approach designed to:

  • prevent an attack
  • limit the exposure
  • respond to an incident in the event prevention fails

Chubb insurance is issued by Chubb Insurance New Zealand Limited (Chubb) Company No.104556, FSP No. 35924. Chubb only provides factual information and does not consider your objectives, financial situation or needs. To decide if any product is right for you please refer to the relevant policy and obtain your own financial advice if necessary.

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