United States: Five Questions Clients Asked Most Often In 2015 About Incident Response

Last Updated: January 21 2016
Article by Craig A. Hoffman

We provided incident response and incident response preparedness services to hundreds of companies in 2015. The questions we answered were as unique and varied as the incidents companies faced. Some were challenging, and occasionally they were easy to answer (e.g., Can we create a fake employee to sign the notification letter?), but often they were focused on what practical steps companies can take to be better prepared to respond, how to make certain decisions during an incident, and what is likely to happen after disclosing the incident.

(1) If incidents and attacks are inevitable, what preparedness steps should be taken? We talk to companies about being "compromise ready"—a constant state of diligence focused on prevention and improvement of response capabilities. The areas of preparedness that go into becoming compromise ready include: (1) preventative and detective security capabilities; (2) threat information gathering; (3) personnel awareness and training; (4) proactive security assessments focusing on identifying the location of critical assets and data and implementing reasonable safeguards and detection capabilities around them; (5) assessing and overseeing vendors; (6) developing, updating, and practicing incident response plans; (7) understanding current and emerging regulatory hot buttons; and (8) evaluating cyber liability insurance.

Obviously, accepting that incidents are inevitable does not mean it is not worth trying to stop them. Companies still need to use preventative technologies to build the proverbial moat around their castle to protect their systems and comply with any applicable security requirements (e.g., statutory, contractual, or formal/informal precedent from enforcement actions by their regulators). The right technological safeguards may prove sufficient to prevent many attacks. But when companies find a way to stop one attack vector, attackers do not give up and look for a new line of work. Rather, they are repeatedly observed finding ways around technological barriers. Most security firms will tell you that a capable attacker will eventually find a way in. Why? Most networks are built, maintained, and used by people, and those people are both fallible (e.g., able to be phished) and subject to a range of constraints (e.g., budgets, production priorities). Thus, companies should assume that even if they install the most advanced technology solutions and receive certain security certifications, their security measures may fail and an unauthorized person may gain access to their environment.

That reality drives the next two areas of preparedness: (1) implementing detective capabilities (e.g., logging and endpoint monitoring tools and procedures) so that unauthorized access is detected quickly, and (2) developing and practicing a flexible incident response plan. Two key parts of incident response planning are identifying the companies you will work with to respond and then building those relationships before an incident arises. In a prior blog post, I discussed " How and Why to Pick a Forensic Firm Before the Inevitable Occurs." Companies do not always get the "luxury" of having 30 days to investigate, determine who may be affected, and then mail letters. Spending a few days just negotiating and executing a master services agreement and a statement of work with a forensic firm so that the forensic firm can begin to investigate can make the difference between meeting or missing a 30-day disclosure deadline.

Companies can use the Law & Order approach to building a tabletop exercise—read disclosures from other companies and the security firm reports that detail the incidents they investigate. It is often beneficial to have the law firm, forensic firm, and crisis communications firm that will work with you during the incident participate in developing and leading the exercises. An experienced incident responder leading the exercise will be able to provide helpful context during the exercise if the CISO states that he or she will identify, contain, and fully investigate a significant incident in a few days, or if the communications team wants to make notification no later than seven days after discovery or say that the company is implementing "state-of-the-art security measures" to make sure an incident never happens again.

(2) Where can companies improve? Three places: (1) detect incidents sooner, (2) contain them faster after detection, and (3) keep good logs to facilitate a more precise determination of what occurred before the attack was stopped. In general, after an attacker gains an initial foothold in a network, there is a period of internal reconnaissance when the attacker works to learn about the network so the attacker can escalate privileges, move laterally, and complete the attack mission. The goal of implementing detective capabilities as part of a defense-in-depth strategy is to find and stop the attack at the earlier phases of the "cyber kill chain," before the attacker reaches sensitive data. This approach goes beyond trying to prevent attacks with firewalls and antivirus to incorporate endpoint monitoring and a SIEM to aggregate logs. Companies are signing retainer agreements with security firms that will conduct investigations when incidents are detected. A good use of the annual hours that are usually provided in exchange for the retainer payment involves different onboarding activities—helping the security firm understand the company's environment, looking at logging practices to see if the company is logging what the forensic firm will need to conduct an investigation, and understanding the deployment process (or even doing pre-incident deployment) of endpoint monitoring and other tools the security firm will use to conduct the investigation. Our blog titled "Incident Response Tip: Five Ways to Improve Information Security and Reduce the Impact of a Data Breach" provides additional insight on this topic.

(3) Does the worst-case scenario have to be assumed if there is limited forensic data? One of the most difficult decisions during an incident response occurs when the forensic findings are inconclusive because there is not sufficient forensic data available to determine what occurred. Unfortunately, this is not uncommon. Companies often find themselves confronted with findings that show an attacker gained access to the network and had the capability to access and acquire sensitive data, but the investigation screeches to a halt at that point. For example, a forensic firm may tell a company that it sees an attacker gained access to the network six months ago, installed tools, and then used the tools to connect to a database server. But beyond stating that the attacker had the capability to query and exfiltrate the results, the firm cannot determine whether the attacker's queries failed, returned one row of data, or accessed the contents of the entire database. The company then has to turn to secondary indicators to attempt to infer the likelihood of unauthorized acquisition (e.g., are customers reporting fraud or misuse, or did law enforcement provide the initial notice because of intelligence they obtained?). Lack of forensic data can occur because the attack began long enough ago that logs necessary to complete the analysis have been overwritten, logging was not configured to capture the necessary details, logging was not enabled at all, or the attacker used anti-forensic techniques to destroy forensic artifacts (e.g., s-delete, time stomping).

Because the state breach notification laws are consumer protection laws, a company may choose to notify out of an abundance of caution. This usually results in over-notification. In many investigations where there is adequate forensic data, the findings usually show that the data at risk is less than the worst-case scenario. If you read breach notification press releases, it is not uncommon for companies to state that the attack affected only a percentage of their locations or involved only certain data elements. Surprisingly, being able to show precisely what was accessed during the attack usually results in notification to a smaller group of individuals about fewer at-risk data elements. Knowing with greater certainty what was at risk and having the ability to show that certain data elements were not affected often plays a key part in a company's dialogue with regulators, customers, and provides support for defenses in enforcement actions and lawsuits.

(4) What happens after the company provides notice? Many companies assume that they will be sued as soon as they disclose the incident. While putting our 2015 Incident Response report together, we noticed that we worked with companies that provided notification by mail or substitute notice 75 times in 2014, and lawsuits were filed against only five of the companies. Our 2015 Incident Response report reveals a more frequent post-disclosure event—inquiries from state or federal regulators (31% of the time). Predicting whether class actions will be filed or investigations will occur is difficult, but common factors include: listing the number of affected individuals in the notice and the number is "big," sensitive data is at risk (e.g., SSNs or PHI), the attack went undetected for a while, there is a gap between detection and notification, the company's size and brand, and whether media coverage of the incident goes beyond reporting the facts and includes criticism of the company. Notwithstanding the common factors, we have worked with national brands that disclosed significant incidents and were not sued or investigated, and we have worked with small companies that faced multiple investigations and claims.

(5) How will this impact the company? The most obvious and immediate impact will be the first-party costs (e.g., costs of mailing letters, providing credit monitoring, forensic investigation, crisis communications) and third-party costs (e.g., paying customer claims, defense of lawsuits and regulatory investigations). A lot gets written about the potential for "churn" and loss of revenue, but these are not routine occurrences, and when they do happen, it is hard to isolate and attribute them solely to the incident. Public companies face a decision about whether to file an 8-k contemporaneously with their initial public disclosure, followed by preparing quarterly updates on impact for their 10-q filings. One of the most underestimated and least discussed post-incident impacts comes from disruption and loss of productivity. For significant incidents, key personnel may spend some or all of the business day (or more) on incident response tasks for several months. Their day jobs either get done at night, delegated, or delayed. After the continuous intensity of the initial response dwindles, members of the incident response team still face completion of remedial measures, regulatory investigations, defense of lawsuits, insurance recoveries, financial reporting, etc. The impact on productivity caused by an incident can easily last a year or longer. Even if the company gets through the incident relatively unscathed, should the company fail to take steps to prevent a reoccurrence or a different event occurs, multiple publicly known incidents will subject the company to greater scrutiny and possibly an increased likelihood of adverse consequences.

Although these are five frequently asked questions, companies never actually run out of questions during an incident or when they are seriously preparing to be better able to respond. The volume of questions reflects the diversity of incident types and unique challenges that arise during a response. Unless you have experienced incidents firsthand, it is hard to fully appreciate the complexity and intensity a significant incident brings. We have talked to regulators who have acknowledged that they would benefit from actually going through an incident on the company side. You soon learn that there is no such thing as a perfect response.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions