COMMUNICATION STRATEGY IS KEY When a breach occurs, how a company communicates can significantly impact the outcome. Aside from the technical aspects, a well-structured response team should include public relations experts to manage external communications. This team needs to coordinate messaging across all stakeholder groups, from customers and vendors to employees and regulators. The most successful response strategies prioritize transparency while maintaining appropriate legal safeguards. Companies should avoid the common pitfalls of attempting to hide breaches or issuing unhelpful “no comment” responses which often backfire and damage customer-facing relationships. Instead, organizations should prepare comprehensive communication plans that include addressing customer service responses and monitoring media coverage. THE ROLE OF CYBER INSURANCE As most general liability policies exclude cyber attacks, companies must carefully evaluate their need for specialized cybersecurity coverage. These policies can transfer some financial risk to insurers to cover expenses like legal counsel, breach investigations, notification costs, and other costs. Cybersecurity insurance also typically provides access to crucial expertise, including forensic specialists and regulatory compliance experts to aid with crisis management and recovery efforts. However, cyber insurance comes with significant considerations. Premiums can be substantial, particularly for companies deemed high-risk. Coverage often includes important limitations, potentially excluding costs like business interruption or litigation damages. Some policies may deny coverage based on employee negligence or inadequate security protocols. For manufacturers weighing this decision, insurance brokers can provide valuable guidance in evaluating coverage options and determining appropriate levels of protection based on specific risk profiles, which will vary from manufacturer to manufacturer. LOOKING FORWARD As digital systems become increasingly central to manufacturing operations, the importance of robust data security measures only grows with time. Success requires a balanced approach: understand what sensitive data you have, implement comprehensive security measures, prepare detailed response plans, and maintain clear MANAGEMENT Success requires a balanced approach: understand what sensitive data you have, implement comprehensive security measures, prepare detailed response plans, and maintain clear communication protocols. While the challenge may seem daunting, taking these strategic steps can significantly reduce risk while maintaining operational efficiency and stakeholder trust. communication protocols. While the challenge may seem daunting, taking these strategic steps can significantly reduce risk while maintaining operational efficiency and stakeholder trust. SETH SKILES is the founder and managing attorney at IO Law, www.iolaw.io, where he advises startups and global brands on commercial transactions, regulatory strategy, data privacy, and dispute resolution. With experience as Deputy General Counsel at Heineken USA and senior legal roles at Compass and Blue Apron, Seth brings a deep understanding of corporate operations and innovation. Seth combines big-firm expertise with the cost-efficiency of a boutique practice to help clients navigate complex legal challenges. WWW.ARPMINC.COM / 15
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