Safe Harbor laws: Mitigating the impact of a data breach

Today’s cybercriminals have become increasingly more sophisticated in their ability to exploit weaknesses in security defenses. When a data breach does occur, the biggest losers, of course, are businesses who must explain the impact to stakeholders and shoulder the cost of recovery.

To help minimize damage resulting from a data breach, most states have enacted Safe Harbor (Against Data Breach) laws, which are often linked to existing IT governance and security frameworks such as the National Institute of Standards and Technology (NIST). To be eligible, however, Safe Harbor rules require businesses to implement best practice security protocols and procedures as part of a clear, well-defined data security framework.

Safe Harbor advantages

The goal of safe harbor laws is to impel businesses to take proactive measures to protect sensitive and confidential data. When a data breach occurs, a notification requirement is triggered where the business must notify the compromised parties regarding the details of the breach. Depending on the jurisdiction, some laws may also require the business to notify credit bureaus and local government agencies.

Safe harbor laws provide businesses with two distinct benefits. First, they can help ease the level of scrutiny from regulators and reduce fines and penalties for data breach violations. The rationale is that if a business is following sound security practices, why should they be punished to the same degree as an organization that has invested little into data protection and security?

Second, the law provides a natural incentive for businesses to voluntarily improve their cybersecurity practices, which is a benefit for the marketplace overall. What’s more, implementing robust security measures is a smart business strategy, particularly in light of today’s escalating cybersecurity threats.

Reaping the benefits of data encryption

Many safe harbor laws include a provision that rewards organizations that have implemented sound data encryption technology, allowing them to classify a data breach as an “incident” rather than a “breach.” The advantage of this classification is that it can exempt companies from the expense and (potential reputational harm) of having to comply with breach notification requirements.

While encryption offers an effective way to reduce risk, not all encryption will get you off the hook from notification. To fully protect your business and achieve safe harbor status, you must employ robust, role-based encryption and implement effective encryption key management techniques, including the protocols and procedures of how keys are generated, distributed, stored, and replaced.

Avoiding a breach altogether is always the better option, even if notification is not required. Understanding your current security posture and building an effective data security framework is more than managing a checklist of tools and policies. It requires a holistic approach that takes into consideration your unique data protection and access needs, regulatory and market pressures, and long-term business goals.

The good news is that with the right mix of technology, engineering know-how, and smart policies, building a solid data breach defense is possible.

Building a solid security foundation

While implementing the right technology, like strong access controls and user authentication methods, is important, it’s not the whole solution. The users who interface with IT systems must also be educated and instructed in how to perform their tasks. And, the policies and procedures that define the actions must be properly designed and consistently enforced.

Additional proactive measures can provide an extra layer as part of a comprehensive security strategy.

• Create a culture in which people talk about data protection and security, and make security a clear priority. Teach users about secure online practices such as how to recognize potential threats and phishing attempts. Check their security awareness with in-house hacking checks and interactive security activities.
• Simplify and streamline security with solutions that consolidate authentication, encryption and advanced threat protection into a single security suite. Compared with point tools, these integrated systems require a fraction of the IT resources required to maintain effective threat protection.
• Deploy updated anti-malware to help prevent malicious software such as ransomware and viruses from sneaking into your network, and make sure your anti-malware software is consistently updated with the latest definitions
• Define policies and procedures. Usage policies define what behaviors are and aren’t acceptable. Work with your internal team to define and implement policies and practices based on your usage preferences and requirements or mandates specific to your particular market.
• Keep patches current―make sure your practices include automated patching to help enforce policies and keep systems up to date and enforced with the latest software patching.
• Make backups of all your data and software on a storage device that is not attached to your network or computer. Confirm that all your backups are operating properly and test them on a regular basis to make sure they will perform when you need them.

Without a clearly defined plan and ongoing commitment to effective data protection and oversight, your organization may fail to meet the standards needed to reap the benefits of Safe Harbor protection.

Some important points to keep in mind:

• Safe Harbor statutes can help minimize costs and potential reputational damage arising from data breach lawsuits.
• Cybersecurity insurance can help ease the cost of recovery from a data breach incident.
• Following data security best practices is the best way to leverage the benefits of Safe Harbor laws.
• Building your security strategy around a framework like NIST can help ensure alignment with current security practices and techniques.

Combining technology with the right expertise

As cybersecurity becomes increasingly more complex, many organizations lack the resources and knowledge they need to create an effective strategy. That’s why you need a trusted security expert who not only understands the latest security trends, but can accurately define your business requirements and implement a plan that aligns with your current and long term needs

Safeguarding your vital IT infrastructure is not just a security concern; it is a fundamental business issue. It requires an intelligent investment in resources to meet an increasingly complex threat landscape. Ultimately, the cost of recovering from a breach will always be more exorbitant than any expenses incurred in safeguarding data with the right expertise and technology.