Key Questions to Ask When Preparing a Data Breach Response Plan (Part II)

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Following up on last week’s post, we return to the wide range of questions about a company’s operations that can guide a team building a data breach response plan to cover many of the risks encountered in the wake of a breach.

Who are the key stakeholders?

Many parts of an organization may be impacted – or may need to be at the table to respond to a data security incident or breach. Some, like the IT security team and legal department, may by easy to identify. But there are most certainly other key stakeholders including representatives from the compliance, human resources, communications/media relations and customer service areas of the organization.

It is also important to think about which stakeholders are contacted first when a breach is detected. For example, the organization may need to engage the security and IT teams first in order to try to stop the incident (if it is ongoing) or fix identified security vulnerabilities that played a part in the breach. Additionally, organizations may need to notify legal counsel as soon as the breach is identified to determine whether law enforcement needs to be engaged or regulatory bodies need to be notified. Some law firms, including Foley & Lardner, offer 24 x 7 x 365 hotlines to allow clients to speak with a data security attorney at any time to provide counsel during the early stages of a breach.

In addition to identifying the stakeholders who need to be involved in responding to an incident, organizations should also identify stakeholders who need to be communicated with during the response, including the company’s board, investors, regulatory authorities, customers, and the press. The messages to each – and the timing of those messages – will likely differ stakeholder-to-stakeholder, but your response plan should at least identify who those stakeholders are in advance to minimize the risk of missing an important audience.

Does our insurance cover security incidents and data breaches?

Depending on the nature of the incident, the organization’s insurance policies may provide some protection for data breaches. Analyzing the scope of the policies and the applicable procedures for notifying the insurance provider and filing a claim can be time consuming and will require a careful and detailed review of the policy documents.

Before an incident occurs, organizations should carefully review their insurance policies – and all of the associated fine print – to determine if the policy covers data breaches or security incidents and, if so, what the company needs to do to file a claim. That information, particularly with respect to procedures, should be incorporated into the response plan to ensure the organization brings its insurance providers into the process at the right time. There is an additional benefit to doing a careful review of an organization’s insurance in advance: if the policies do not cover breaches (or only provide coverage in limited circumstances), it gives the organization an opportunity to purchase additional cover to fill the gaps. Likewise, the analysis may also produce recommended changes to the minimum insurance requirements the organization requires vendors to meet if they will have access to personal information.

Have we experienced an incident in the past?

Prior security incidents are valuable learning tools in preparing a response plan. If your organization has experienced a breach in the past, it is important to examine the response to identify practices that worked well, lessons learned and materials that were developed (such as notifications to impacted individuals) that can be leveraged, adapted and improved on moving forward.

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Topics:  Commercial Insurance Policies, Data Breach, Risk Assessment, Risk Management

Published In: General Business Updates, Insurance Updates, Privacy Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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