How Can A Company Reduce Legal Risks After A Data Breach?
A data breach can be inherently dangerous for any type of business, as it can have a massive fallout. Not only can it lead to financial losses, but there can be other things like a loss of reputation, among many others. That’s why it’s a very good idea to figure out how to reduce legal risks if the company had any data breach. And here’s what you need to know.
Conduct a legal risk assessment
First, naturally, you want to talk with the data breach lawyers and also see what the breach entails. After that, you want to conduct a legal risk assessment. Usually, that should cover the jurisdictional laws, any contractual obligations you have with customers and vendors in regards to data security. And, of course, you also want to estimate the extent of financial losses. Those should include litigation exposure, remediation-related costs and losses in general.
Preserve documentation
It’s very important to accumulate evidence and also ensure that you preserve it for any potential lawsuits. Some people will file a lawsuit against you, and it’s a very good idea to preserve all the possible evidence. That does include forensic data, emails, system logs, etc. Plus, you also want to document all the response steps, and maintain a communication log as often as you can.
Notify the affected parties
You are legally required to notify any of the parties that were affected. According to the GDPR, you have to notify them within 72 hours. The CCPA also has a notification notice, and HIPAA also comes with a 60-day notice.
Any notification needs to cover things like the incident time frame, the nature of that breach, but also actions that are being taken and the recommended steps needed for the individuals to protect themselves. In these situations, you always want to maintain a high level of transparency. It reduces the risk of litigation, while also lowering the impact of reputational damage.
Cooperate with law enforcement and regulators
Generally, during these situations you always want to reduce legal exposure and that means collaborating with the authorities, but also any regulators. Perform voluntary disclosure and also offer clear documentation. Ensure that you also follow the regulatory guidance, that’s super important, and it helps prevent any legal risks and further issues such as fines. In the end, you want to collaborate with the regulators and authorities, while showing that you are not at fault and you genuinely want to help.
Hire a professional cybersecurity forensics team
The thing is, you do want to perform technical analysis to see what was wrong and how you might be able to remedy these issues. The idea is that you want to identify the root cause behind the breach, while also identifying the scope of that compromised data. And of course, you also want to verify if the security controls meet industry standards or not. Ensuring that the cyber security program aligns with the ISO 27001 or any other international settings is extremely important, and it can indeed make a huge difference going forward.
Another thing that you must do in these situations is to try and focus on improving the data security policies. That’s the thing, you want to review the data governance framework of your business and see if there are areas of improvement. Which, in the case of a data breach, of course there will be things you can enhance. Some great areas for improvement are:
- Train your employees so they recognize any phishing attempts and they are less prone to scammers.
- Evaluate your vendors and see if they are all compatible with the security standards.
- Encrypt customer and valuable business data, since it will always provide an additional layer of security, and it can indeed prove to be very useful.
- Data minimization will allow you to retain solely the data your company needs to operate. Other data can be kept separately and it will be a better idea to operate this way, where possible.
In addition to these things, it also makes sense to have an incident response plan as well. Make sure that everyone within the company has defined roles when it comes to this type of stuff. You also want to have a communication strategy, along with a decision tree prepared, and incident response drills should take place, just to test readiness and see what can be improved.
Conclusion
It’s very difficult for any company to deal with legal risks and challenges, especially after a data breach. But that’s the thing, you always want to avoid any rush and make sure that everything is implemented professionally and you have legal assistance, where possible. A data breach lawyer will be able to offer support, and they will be there to help you every single step of the way. It alleviates concerns, while also preventing any major legal ramifications down the line!
