In this article appearing in RMMagazine.com, Emy Donavan tells us that cyberrisks are evolving fast, and are now the second most important peril to businesses, as estimated by 1,900 experts globally.
The compromising of personal information or intellectual property can lead to data breaches which can result in third-party liabilities and first-party costs. That aside, network liability can be incurred as well if a corrupted file is transferred to another company. Further, there is also the risk of cyber extortion and interruption to business on account of targeted attacks against the company’s computer system. There has also been a recent rise in distributed denial of service (DDoS) and ransomware attacks. All this has led to the introduction of the General Data Protection Regulation (GDPR), and the Network and Information Security Directive (NIS) in the European Union and many U.S. states.
Research shows that costs associated with breaches are on the rise – it rose by more than 6% to $3.86 million last year. Further, the average cost for each lost or stolen record also increased by almost 5% to $148. A study also indicates that more than 52% of incidents involve human factors. These trends have given rise to tougher rules being introduced around the world, with new measures and steep fines for non-compliance.
In the future, it may be possible for a company to claim damages from their directors for negligence or lack of controls. That aside, the adoption of AI could present companies with more sophisticated cyberattacks. Besides this, the new rights for consumers can potentially increase third-party liability risk and threat of litigation.
Businesses should ensure that they review data protection and classification practices, implement security automation tools that can highlight pre-compromise vulnerabilities, deliver timely software updates and patches, and maintain secure backups of data and servers on a regular basis. If sensitive data is compromised, a response from the company at all levels is necessary.
Cyber insurance protects against financial losses such as BI and restoration costs and should be a part of any mitigation strategy. A strong policy can provide instant access to specialist counsel, network forensic services, crisis management consultants and more. Click on the following link to view the original article in full: http://www.rmmagazine.com/2019/01/28/the-changing-risk-and-liability-landscape-for-it-security-and-data-risks/