On paper, coping with a data breach involves calmly stepping through the items on a well-crafted response plan. In reality, a cyber breach response is a hectic juggling act where dropping any single ball means lasting damage to a business. With their cyber liability insurance, your clients took the first step in a data breach response effort. Before these clients face a cyber intrusion, share these best practices for avoiding data breach liability.
Mind Your Language
Communication discipline can limit the risk of litigation. Step one: Never use the word “breach” while evaluating the severity of a network intrusion. All by itself, the use of “breach” elevates the risk of a lawsuit. If your client must communicate with news media or stakeholders in this early phase, advise using “incident” until a forensic investigation confirms a breach.
Protect Attorney-Client Privilege
In the scramble to deal with a data breach, many companies neglect proper documentation of their internal communications and needlessly expose reports to discovery in litigation. The first step for ensuring attorney-client privilege is preserving all information requests from legal counsel. Next, advise your clients to title their replies with “Prepared at the Direction of Counsel” with the attorney’s name and the date of the request. If the data breach triggers litigation, these simple steps can keep legitimately privileged information shielded.
Assess and Contain the Damage
In the immediate aftermath of a breach, your client may want to rush a network patch. This approach can be an expensive mistake. By corrupting evidence of the intrusion, these rushed half-measures may well elevate your client’s liability. Allowing an outside forensic team to wall off the affected network nodes demonstrates due diligence and aids law enforcement. Though nerve-wracking, following this measured path also enables the prevention of similar attacks.
Limit Harm to Customers
The necessary efforts to retain customers will vary widely depending on the severity of the breach and your client’s business. Consumer-oriented companies may pay for identity protection services. Suppliers may choose to make contract concessions for downstream customers.
The single essential thread in every successful mitigation effort is timely and honest communication. Urge your clients to frankly state the nature of the intrusion and the impact on customers and stakeholders. Companies that go the extra mile in their mitigation efforts hold on to their customers, head off litigation and limit damage to their hard-earned reputations.
Managing a data breach is a frazzling process, but the customer service your team provides in this trying period can earn long-term client loyalty. Similarly, access to surplus lines can substantially help your efforts to place new customers who need cyber liability insurance. Partnering with a surplus specialist MGA is a proven way to grow your agency’s book.
About Cochrane and Company
For more than six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market, and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients across the nation, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (509) 462-1148.
