Yahoo Is Trying to Pass the Buck, but Data Breach Responsibility Starts at the Top

Who should be held responsible when a company’s systems get breached? Historically, the CIO, the CISO, or both have shouldered the lion’s share of data breach responsibility; well over half of security decision-makers expect to lose their jobs if a hack happens at their organizations. However, breaches don’t happen in vacuums, and CIOs and CISOs don’t operate in them, either. Many CIOs report directly to the CEO, and some security experts feel that CISOs should be elevated to the same reporting level.

Whatever an organization’s reporting structure, the bottom line is the same: the responsibility for everything that happens within the organization, positive or negative, ultimately falls on the CEO and the board of directors. This includes data breach responsibility. This has been reflected in the numerous CEO firings (or “resignations”) that have followed bad breaches over the past few years, including those at Target, Sony Pictures, and the Democratic National Committee.

Apparently, Yahoo didn’t get the memo about this. After years of poor cyber security practices caught up with them, resulting in multiple breaches affecting over a billion user accounts, putting its acquisition by Verizon into question, and making the Yahoo brand name synonymous with the phrase “data breach,” the company decided to fire … its General Counsel, Ron Bell. Shockingly, CEO Marissa Mayer remains in place, albeit with a pay cut.

In Yahoo’s case, the CISO and the rest of the security staff couldn’t be fired. Fearing that a major security incident would eventually happen, they’d already run for the hills. The New York Times reported that former CISO Alex Stamos and his team had spent years warning Mayer of potential security issues, but Mayer insisted on putting “the user experience” ahead of cyber security and even cut the team’s budget.

Preventing Breaches Is Everyone’s Responsibility

Cyber security isn’t just an IT issue. It impacts every individual and department in an organization, from the board of directors all the way down to minimum-wage clerical and retail employees. The overwhelming majority of data breaches originate inside an organization, either because a negligent or untrained employee makes a mistake or a malicious insider decides to strike back against the company. No cyber security policy is complete unless it addresses the human factor behind data breaches by promoting a culture of cyber security awareness. This culture must start at the top of the organization; if the board, the CEO, and the rest of the C-suite do not take security seriously, front-line employees certainly won’t.

Yahoo’s firing of Ron Bell has shaken up the legal community and is causing much debate over where data breach responsibility ultimately lies. While this may serve to light a fire under organizations with questionable cyber security practices, the focus should not be on whose heads will roll if a breach happens; it should be on implementing proactive cyber security and compliance measures to prevent hacks from happening in the first place.

As for Yahoo, the company is now looking at a possible worldwide class-action lawsuit alleging security issues dating back as far as 2003. Should the suit proceed, we’ll see what the courts have to say about data breach responsibility.

The cyber security experts at Lazarus Alliance have deep knowledge of the cyber security field, are continually monitoring the latest information security threats, and are committed to protecting organizations of all sizes from security breaches. Our full-service risk assessment services and Continuum GRC RegTech software will help protect your organization from data breaches, ransomware attacks, and other cyber threats.

Lazarus Alliance is proactive cyber security®. Call 1-888-896-7580 to discuss your organization’s cyber security needs and find out how we can help your organization adhere to cyber security regulations, maintain compliance, and secure your systems.

The word “ransomware” has become synonymous with the healthcare industry, but government ransomware attacks are a growing threat.

Over the past year, the healthcare industry has been battered by an epidemic of ransomware attacks. The problem has become so ubiquitous that it is making their way into works of fiction: A ransomware attack on a hospital in a major city is the focus of an upcoming episode of the NBC drama Chicago Med. However, a new study by security ratings firm BitSight reveals that the number-one target for ransomware is the education industry, followed by the government sector. In fact, BitSight reports, government ransomware attacks have tripled over the past 12 months.

Among the recent high-profile government ransomware attacks that have grabbed headlines:

• In January, hackers installed ransomware on a police closed-circuit surveillance camera network in Washington, D.C., disabling 70% of the cameras only eight days prior to President Donald Trump’s inauguration.
• In March, ransomware disabled the IT network used by the Pennsylvania State Democratic Caucus, locking 16 senators and their staff out of the system and throwing the caucus’ website offline.
• In late January, several local government offices in Ohio were hit by ransomware, including a county police force and 911 center, forcing the 911 center to operate in manual mode and lengthening emergency response times.
• A new twist on government ransomware has recently been targeting public sector organizations in the Middle East; instead of being instructed to pay a ransom to unlock their networks, victims are being extorted to post inflammatory public statements against various political figures.

Why the Public Sector is Being Targeted

Government agencies are attractive ransomware targets for many of the same reasons medical facilities and schools are. Their networks store and process reams of highly sensitive data; public sector employees suffer from the same lack of security training and awareness that plague the private sector; and an inability to access a government network could put people’s lives at stake, as in the case of the 911 center in Ohio.

Government bureaucracy exacerbates the problems. While it may not be easy for IT personnel at a private-sector corporation to convince the C-suite they must invest in cyber security improvements – just ask anyone who worked at Yahoo! – nailing down an appropriate security budget can be even more difficult at a government agency. Not only must public-sector IT employees argue their case to their bosses, but also, the general public, the taxpayers whose money will be used to fund these improvements, have to be convinced. As the Pew Research Center recently found, very few Americans have even a fundamental grasp of cyber security risks and best practices, creating a situation where elected figures are asking their constituents to fund services they do not fully understand and may not see a need for. The government machine also tends to move very slowly; public sector agencies have always been notorious for being years behind the private sector in adopting new technologies.

Not surprisingly, BitSight ranks the government sector second-to-last in its security ratings.

Cyber Security is Not a Partisan Issue

There are some bright spots in the fight against government ransomware and other cyber attacks against the private sector. Virginia Governor Terry McAuliffe (D) has made cyber security the focal point of his chairmanship of the National Governors Association. The association’s winter meeting in February put a heavy emphasis on the need for state and federal governments to work together to improve their cyber security postures.

Government ransomware attacks are not a partisan issue, and there is no such thing as an agency that is “too small” to be victimized. A series of small cyber attacks could be employed by terrorists to create confusion and distraction as part of a much larger real-world terrorist attack. Attacks against the public sector, whether a federal government agency or a local police department, are a matter of public safety. They are everyone’s problem. Waiting until an attack happens and attempting to clean up the mess doesn’t work in the private sector, and it certainly doesn’t work when critical infrastructure such as a 911 system is hampered or disabled. Government agencies of all sizes must take the ransomware threat seriously and employ proactive cyber security measures to prevent their systems from being victimized.

The cyber security experts at Lazarus Alliance have deep knowledge of the cyber security field, are continually monitoring the latest information security threats, and are committed to protecting organizations of all sizes from security breaches. Our full-service risk assessment services and Continuum GRC RegTech software will help protect your organization from data breaches, ransomware attacks, and other cyber threats.

Lazarus Alliance is proactive cyber security®. Call 1-888-896-7580 to discuss your organization’s cyber security needs and find out how we can help your organization adhere to cyber security regulations, maintain compliance, and secure your systems.

Cyber Insurance Coverage: a Brave, Uncertain New World for Insurers and Policyholders

Despite the escalating intensity and frequency of cyber attacks, fewer than 1/3 of U.S. businesses have purchased cyber insurance policies. A recent report by Deloitte provides insight into why organizations are deciding to go without cyber coverage, as well as why many insurers are hesitant to offer the coverage on a large-scale basis.

According to a recent report by Deloitte, Demystifying Cyber Insurance Coverage, cyber insurance policies represented only $1.5 to $3 billion out of a total of $505.8 billion in premium revenues generated by U.S. carriers in 2015. Further, only about 29% of organizations had even purchased a policy as of October 2016. Just 40% of Fortune 500 companies have coverage. Even companies that do have policies may have “skinny” coverage that will leave them high and dry if they ever do file a claim; just ask fast-casual restaurant chain P.F. Chang’s, which found out the hard way that its cyber insurance policy did not cover millions of dollars in liabilities to credit card issuers in the wake of a POS breach.

Why is cyber coverage so spotty? It’s easy to point fingers at insurers, policyholders, or both. After all, insurance companies do not make money from paying claims; they make money from collecting premiums and paying claims only rarely. When a policyholder files a claim, whether it’s for a roof repair or a ransomware attack, the insurer will look for every reason not to pay out. At the same time, both the public and private sector are guilty of not taking cyber security seriously; from Yahoo to Major League Baseball to the U.S. Secret Service, organizations keep getting breached, yet they also keep behaving as though a major cyber attack will never happen to them.

While these are valid issues, the cyber insurance situation is not that simple. Deloitte’s report identified numerous obstacles in the path of both insurance companies that wish to sell policies and organizations that wish to buy them. Specifically, insurers struggle with:

• A lack of historical data, making it difficult or impossible to build reliable predictive models.
• The dynamic nature of cyber security, where brand-new threats are emerging literally daily.
• The potential for “catastrophic accumulation” of claims if a nationwide or worldwide cyber attack brings down hundreds or thousands of claimants simultaneously; for example, if cyber terrorists were to strike the nation’s power grid, or a major website host is taken down.
• “Tunnel vision,” which causes insurers to primarily focus on policies that protect insureds against the theft of personal identifying information (PII); not all organizations handle PII, and the threat landscape includes DDoS attacks, ransomware, and other attacks that can cripple an organization but do not involve the compromise of PII.

On the other side, policyholders are plagued by:

• Not fully understanding their cyber risks or insurance options; similar to the situation with health insurance, many organizations feel they don’t “need” cyber insurance or require only bare-bones policies.
• Erroneously thinking that they are already covered because another insurance policy, such as a general liability or business interruption policy, does cover some degree of cyber risk.
• An inability to effectively compare policies due to a lack of standardization, another issue that seen in the individual health insurance market; buyers are unable to make “apples to apples” comparisons.
• A legal landscape that is as dynamic as the threat environment; what is and isn’t covered by an insurance policy can be hard to determine, and insureds fear having to duke it out with insurance companies in court.

Cyber Insurance Is Not a Replacement for Proactive Cyber Security

Organizations that wish to purchase cyber insurance policies cannot go it alone. They must enlist expert help from cyber security professionals, not only to make sense of potential policies but also to evaluate their risk environments and determine what type of coverage they need. Because the cyber risk environment is continually evolving and changing, cyber coverage should be reviewed annually; a policy an organization purchased two years ago may no longer meet its needs.

Just as homeowners’ insurance is not an excuse to keep your doors unlocked or leave food cooking on the stove unattended, even a robust cyber insurance policy is not a replacement for proactive cyber security measures. Insurance policies will always contain exclusions, especially in cases where the insured was negligent in some manner, claim payouts will never be immediate, and insurance policies cannot repair damage to an organization’s reputation.

The cyber security experts at Lazarus Alliance have deep knowledge of the cyber security field, are continually monitoring the latest information security threats, and are committed to protecting organizations of all sizes from security breaches. Our full-service risk assessment services and Continuum GRC RegTech software will help protect your organization from data breaches, ransomware attacks, and other cyber threats.

Lazarus Alliance is proactive cyber security®. Call 1-888-896-7580 to discuss your organization’s cyber security needs and find out how we can help your organization adhere to cyber security regulations, maintain compliance, and secure your systems.