Cyberattack Highlights the Costs of Breach Response and the Need for Preparation
It sounds like something out of a Hollywood screenplay: foreign hackers, possibly from Russia, induce an unsuspecting employee of a major utility company to click on an email attachment that is infected with malware, enabling the hackers to cripple the utility’s computer systems unless a ransom is paid. Unfortunately, this story is fact, not fiction.
You may have read about the cyberattack suffered by Lansing’s Board of Water & Light (“BWL”) in a recent Lansing State Journal (“LSJ”) article. The scenario described above, left BWL scrambling - and racking up a huge bill - to remedy a cyberattack that disabled BWL’s ability to communicate internally and with its customers. According to the LSJ report, BWL incurred costs nearing $2 million for technical support and equipment upgrades in the wake of the incident.
BWL’s experience holds important lessons for other businesses and organizations - the threat of a cyberattack is real and preparation to prevent and recover from an attack is essential. In other words, it is critical to have in place a well-designed breach response and business continuity plan. In a world of ever-increasing cyberattacks, preventative measures and mitigation techniques can be the difference between an enormous bill and a non-issue.
Yet, according to a study by the Disaster Recovery Preparedness Council in 2014, nearly 75 percent of companies are failing in their disaster readiness. That is significant, because as BWL learned, the cost of system failure or disruption is steep. Experts estimate that the cost of losing critical applications can amount to more than $5,000 per minute, a figure that doesn’t take into account lost productivity and damage to business reputation.
We will be outlining recommendations to improve disaster recovery preparedness in future posts, but a quick summary of tactics includes:
- Identify risks to your IT systems and data, and take steps to reduce or manage those risks.
- Develop a detailed disaster response plan that will mitigate damages.
- Regularly update the plan as the systems you are trying to protect changes, and adapt your plan to the ever changing environment of risks.
- Develop a set of User Acceptance Tests - a list of the functions that the business needs to operate - and stress test them.
- Test critical applications more frequently to see if recovery can be achieved without significant downtime.
In today’s interconnected world, the threat of cyberattacks and data breaches is real. It is important that businesses and organizations are ready. This means installing preventative measures, developing response plans, and training staff, so that if (or perhaps when) an attack occurs, critical systems remain operational and the cost of remedial action is limited.
To take the first steps toward breach prevention and mitigation, or to evaluate the effectiveness of your current plan, please call us at 517.371.8238.
Taylor helps businesses and business owners solve and prevent problems as a member of Foster Swift's Business and Tax practice group. He handles business formation and transactions, tax controversies, employee benefits, and technology related issues.View All Posts by Author ›
- Venture Capital/Funding
- Did you Know?
- Digital Assets
- Chapter 11
- Intellectual Property
- Sales Tax
- Electronic Health Records
- Mergers & Acquisitions
- Alerts and Updates
- Fraud & Abuse
- Entity Selection, Organization & Planning
- Tax Disputes
- Department of Labor
- Personal Publicity Rights
- Domain Name Registration
- Social Media
- Trade Secrets
- Entity Planning
- IT Contracts
- Cloud Computing
- Employee Benefits