4 Post-Incident Cybersecurity Legal Challenges


The world of cybersecurity is very dynamic and complex. One of the most challenging aspects of responding to a cybersecurity incident is the unexpected and tangled web of legal issues that emerge. Such things as insurance reviews and auditor investigations are not something expected and could substantially increase the scope of legal liabilities. This article discusses Cybersecurity Legal Challenges and post-incident Legal Considerations in detail.

1. Cyber Insurance Review To Prevent Post-Incident Cybersecurity Legal Challenges

After a breach, usually, one of the first things organizations do is inform their cyber insurer. Insurance may offer significant monetary backup while you rebuild but also presents hidden obstacles. After an incident has occurred, insurers may ask very detailed questions regarding all of the pre-incident security controls and will want insight into what caused the issue in the first place.

Organizations must also fully disclose their security controls for the insurance underwriting process, being as truthful and specific as possible. Over the last few years, insurers have become far less likely to honor claims due to incorrect statements or misrepresentations in the application. In this phase, not giving accurate information could lead to significant fines later on.

Collaboration between your risk management, insurance broker, and outside legal counsel can help minimize those risks prior to an occurrence. It’s a move in the right direction towards being proactive, as opposed to just trying to prove the effectiveness of security control when it matters and when under scrutiny for an insurance application.

2. Auditor Investigations: Post-Incident Scrutiny

Public companies, governmental entities, and even small businesses have routine audits and reviews as a normal operating procedure. But cybersecurity incidents do not pause these stages. There are times when auditors need explanations and what exactly happened.

Having expert cyber incident counsel on hand during an auditor interview could make all the difference. One other point worth making is that anything you say to a CPA in the context of an audit is very unlikely to be treated as confidential and may not be covered under attorney-client privilege. Hence, anything that gets stated about this issue within the Audit can be utilized later on in a court of law.

Organizations need to be sure that their notifications match their audit findings so as to prevent conflicts and potential legal risks, including for employees, customers, prospects, and more importantly the media.

3. Banks and Ransomware Payments: Navigating Post-Incident Cybersecurity Legal Challenges

Faced with hard choices including paying a ransomware demand, organizations face several legal challenges if they move fast enough to beat out the bad guy.

Although many security professionals know the OFAC process, banks are becoming more hesitant in processing wires to known threat negotiation companies. With that said, many of these people are not as fortunate and lack the ability to obtain a stable income.

In order to tackle this issue, organizations ought to have a good understanding of navigating the process of OFAC and also help their banking/financial establishments in that same process to remain within the compliance requirements to avoid any sort of violation whatsoever. Being able to provide a detailed report to banking institutions will speed up approval times for transactions to go through.

4. Notification Requirements: Identifying Obligations to Customers

If your company provides services to other companies/government agencies you probably have legal or contractual obligations that state the types of incident response notifications required. Delayed reporting can lead to contractual liabilities and substantial fines.

This can be simplified by making a spreadsheet that records the timeframe for each notification required before something actually happens. Taking a proactive stance empowers you to quickly respond to notification needs at a time that is already highly demanding of your resources.

Ultimately, Preparedness is the key to a successful incidence response. While it’s critical to have tabletop exercises and an incident response plan, you also need them to be as nimble as the scenario of a breach changes in your organization.

It’s important not only to have a plan ready to handle all the different audiences that might come calling in the wake of an incident but also to take certain steps before disaster strikes to improve your chances of getting through unscathed if the worst happens.

Media Disclaimer: This report is based on internal and external research obtained through various means. The information provided is for reference purposes only, and users bear full responsibility for their reliance on it. The Cyber Express assumes no liability for the accuracy or consequences of using this information.





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