Cybersecurity: Nine tips to Mitigate legal and regulatory liability

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April 2, 2021 | By Reciprocity Labs staff

With technology’s numerous benefits come ever-increasing cybersecurity risks. As hackers devise innovative methods of infiltrating business systems, devastating cyber-attacks have become prevalent. Due diligence and compliance are more important than ever.

To be sure, compliance is a challenge for some businesses, but one that fades in the context of the potential legal liabilities by way of private lawsuit or regulatory action, for a breach. Fines and settlements have been in the millions of dollars.

So consider the following tips to mitigate legal liability and safeguard your business from cybersecurity threats.

  1. REVIEW YOUR DATA STORAGE PROTOCOLS

Commission an audit to understand how your business handles confidential or sensitive data. Determine what data you really need to store; stop collecting anything for which there’s no business need. Often, companies store sensitive data in convenient but insecure locations, like hard disks. If the information is sensitive, keep it in an environment featuring strict security measures.

2. AUDIT YOUR NETWORK SECURITY

Businesses must ensure their systems and devices have appropriate security configurations. Regular threat vulnerability assessments are essential. Besides maintaining an effective firewall, running a secure and well-configured antivirus program can dissuade malicious actions. Make sure you assess data security levels, based on the type of encryptions used, during storage and transmission for all sensitive information.

  1. KEEP AN INVENTORY OF YOUR NETWORK ACTIVITY

Unmonitored network activity increases the risk of undetected intrusions. Keep an eye on your system for suspicious activities. The most reliable way of doing that is to monitor network logs using effective intrusion detection software. Get a clear picture of how your system handles or stores network logs and deletion cycles.

4. IMPLEMENT ROBUST USER AUTHENTICATIO PROTOCOLS

Strict security access controls ensure that only authorized persons can access sensitive information. However, access should be based on business needs. Using weak passwords to access sensitive data can pose serious security threats. Similarly, no employee should be allowed to use one password across multiple accounts. A secure password should be eight characters minimum, with a combination of special characters, numbers, and letters. Make sure that individuals with regular access use two-factor authentication protocols. And in case of multiple login attempts, suspend user credentials pending review.

  1. ADOPT A ROBUST INFORMATION SECURITY MANAGEMENT SYSTEM (ISMS)

Having a good ISMS is a necessity, not an option. Every business must have one to manage security risks and legal liability in the digital age. ISO/IEC/27001 is the standard framework for drafting ISMS protocols. Enterprise adoption of the standard is growing by 91% annually, no doubt motivated by the exponential growth in cybersecurity threats. The framework combines specific data security management risks with a comprehensive strategy to combat cyber threats, vulnerabilities, and impacts.

  1. DEFINE AND PRIORITIZE BREACH RESPONSES

Regardless of meticulous security strategies and protocols, all businesses have some cybersecurity vulnerability. Therefore, every business should formulate a solid incident response plan to mitigate legal liability. The plan should identify team leaders and stakeholders responsible for dealing with a breach and outline their specific duties. At a minimum, it should comply with all applicable regulatory rules and regulations.

  1. INCLUDE VENDOR SECURITY IN YOUR LIABILITY MITIGATION STRATEGY

Most companies use third-party vendors who may have access to sensitive data. Unfortunately, some vendors present significant cybersecurity vulnerabilities, making them part of your company’s risk profile. So if a vendor requires access to your company’s data or network, make sure they’re properly vetted. Before working with any vendor, make sure to explain your security protocols. Include these protocols, as well as security standards and liability clauses in your vendor contracts. Then follow up with regular audits to ensure compliance.

  1. CONSIDER CYBERINSURANCE

These days, virtually all businesses require cyberinsurance to cover damages, fines or legal costs stemming from data breaches. ISO/IEC/27102 contains detailed cyber-insurance guidelines relating to potential financial remediation in case of a breach. The guidelines address the various types of losses covered and what your enterprise must do to qualify for the policy and the indemnities it offers.

  1. EDUCATE & TRAIN YOUR STAFF

For security policies, standards, and protocols to be effective, everyone in the organization must be aware of and committed to observing them. Ultimately, cybersecurity standards are of limited value unless the staff understands the concepts behind them and their implementation. The most effective awareness programs use real-life, practical examples to teach employees about security best practices. However, awareness is not enough. Employees will not embrace and adopt these practices unless the enterprise enforces them.

Reciprocity’s risk and compliance programs help companies manage their information security systems.

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