Cyber insurance claims

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A robust cybersecurity action plan can help a company avoid millions of dollars in potential losses, preserve its reputation amongst customers and clients, ensure it remains in legal compliance and mitigate damage should a breach occur. As such, it is critical for businesses both large and small to employ a comprehensive cybersecurity action plan to protect against data breach attempts and cyberattacks.

Authors: Douglas C. Rawles Kya R. Coletta Katie Goetz

Why a cybersecurity action plan is essential

According to IBM’s 2022 data breach report, the average total cost of a data breach worldwide was $4.35 million, a 2.6% increase in costs from 2021. Strikingly, the average cost of a data breach in 2022 in the United States was $9.44 million as compared to $5.05 million in the United Kingdom—both landing themselves in the top five countries with the highest average data breach costs. Yet, companies reduced their loss by $2.66 million, on average, when they had an incident response team and a regularly tested plan.

When considering whether to create a cybersecurity action plan, it is important to consider the litigation costs that could follow a cyberattack. Because federal agencies and private citizens have a right of action against companies facing a data breach, maintaining cybersecurity hygiene is critical to a company’s financial health, longevity and reputation.

How to create your cybersecurity action plan

There is no one-size-fits-all cybersecurity action plan. This non-exhaustive guide provides best practices for establishing offensive and defensive strategies against cyber threats. The National Institute of Standards and Technology (NIST) framework helps companies to implement and maintain healthy cybersecurity practices. The pillars of the NIST framework, outlined below, provide a helpful starting point from which you can develop and individualize your own cybersecurity action plan.

Step one: Identify

The first step is to identify any laws applicable to your cyber activities. Once identified, you then need to understand what the laws and regulations that govern your industry and region require, to ensure that your plan complies with all legal bases. With the rise in cybersecurity breaches, governments have passed extensive legislation governing companies’ obligations in data security. Although many organizations have now familiarized themselves with the General Data Protection Regulation (GDPR), legislatures are continuing to pass broad cybersecurity laws, some of which are industry and/or region specific.

In conjunction with identifying and understanding legal requirements that apply to your business, you should identify the data, digital assets, programs and applications your company employs to determine what procedures are needed to address the risk of a breach. This includes understanding where your data comes from and goes to, the types of data you process, how you store data, who has access to data and how data moves throughout your organization. Be cognizant of the various applications and programs used by your business, particularly during the flux of remote work, as third-party applications can lead to additional security-threat exposure.

Finally, you should familiarize yourself with the various types of cyber threats to understand your vulnerabilities and ensure your preparedness against a variety of attacks. Common types of cyberattacks include malware, phishing, man-in-the-middle attacks, denial-of-service attacks and domain name system tunneling.

Key takeaways
  • Data breaches can cost companies millions of dollars each year, but a robust cybersecurity action plan can prevent or reduce such losses.
  • An effective cybersecurity action plan should include affirmative steps to identify your organization’s data protection and breach detection measures, data breach response plans, cybersecurity insurance and processes to mitigate losses and assess vulnerabilities following a cyberattack.
  • The most common data breaches can be avoided with a robust cybersecurity action plan.