The best way for a company to handle a data breach is to be prepared. As we discuss in our data breach readiness handbook, preparation includes, among other things, drafting an incident response plan, reviewing cyber-insurance, reviewing contractual obligations with business partners, having relationships to help investigate security incidents, and training your incident response teams.
Preparation also requires anticipating decision-points that are likely to arise in a breach. Our clients often ask to look back at the approximately 600 data security incidents and breaches that we have handled over the years and identify the decision-points that are most difficult.
Many of the areas where we have seen companies struggle involve management-level strategic decisions that must be made when a security incident is identified. This eight-part series explores these difficult decision points. For each there are no “right” or “wrong” answers. Like all strategic decisions management must examine the specific facts facing their company and their organization’s culture, their industry, and business realities.
While there may be no right or wrong answer, in our experience executives that have anticipated these decision points before a breach are better able to make decisions that align with the organization’s overall strategic goals and are able to do so with greater speed and confidence.
Part 1: When To Disclose An Incident.
Situation. Some types of data security incidents are relatively easy and quick to investigate (e.g., sending an Excel file to the wrong party). Other types of data security incidents can lead to complex forensic investigations that may take a significant amount of time to determine whether a breach occurred, and, if so, how an attacker infiltrated an organization’s network and exfiltrated data. For example, many credit card related security incidents require two or three months for an investigator to determine whether there has been a breach and, if so, the extent of the data lost. In situation with relatively long forensic investigations companies can struggle with whether to (1) proactively inform the public/third parties that the company is investigating an incident that may ultimately be a data breach, or (2) wait until the forensic investigation is concluded and a breach has been confirmed prior to issuing a public statement.
Some Strategic considerations: Management typically considers the following factors when determining whether to disclose a security incident:
Pros of early disclosure.
Cons of early disclosure.