The Expert Podcast

Introduction:
Many clients often inquire about the consequences of a cyberattack on a business. Today, we'll delve into a prime example illustrating these repercussions.

The Federal Trade Commission's Action:
  • The Federal Trade Commission, responsible for enforcing and regulating such matters, is taking action against a company for its failure to secure data and notify customers post-breach.
Regulatory Consequences:
  • Cyber attacks, ransomware incidents, or data breaches trigger regulatory repercussions beyond financial losses.
  • Government bodies, both at the state and federal levels, impose regulations that businesses must comply with.
  • Requirements may include consumer notification, the provision of identity protection services, or facing fines and penalties.
Importance of Precautionary Measures:
  • Failure to adequately secure data beforehand, lacking monitoring, proper procedures, or insurance, can lead to severe consequences.
  • Companies, irrespective of size, are subject to the same rules, and the aftermath consequences may transpire years later.
Magnitude of Penalties:
  • According to reports, each violation may incur a penalty of $50,000, multiplied by the number of breached customer records.
  • The penalties can escalate dramatically, highlighting the severity of the consequences businesses may face.
Conclusion:
It's crucial for businesses to comprehend the potential aftermath of cyberattacks, both regulatory and financial. Lack of preparation could lead to dire circumstances with no recourse.

If you have questions or want to delve deeper into today's topics, visit at Riskcoverage.com for additional resources. Until next time, stay insured and stay informed!

What is The Expert Podcast?

The Expert Podcast brings you firsthand narratives from experts across diverse industries, including private investigators, general contractors and builders, insurance agencies, vehicle specialists, lawyers, and many others.

A lot of clients ask what the types of consequences that can come from a cyberattack for a business are. Well, here's a really good example: the Federal Trade Commission, which normally enforces and regulates these, is taking action against a company for failing to secure data and to notify customers after the breach.

So what happens is that anytime you have a cyber attack, ransomware, or some other type of data exfiltration, you have consequences that go beyond just the money. The government at the state level and the federal level will have regulations that you need to comply with. You have to notify consumers; maybe you have to purchase identity protection for them; maybe you have to pay some other type of fine or penalty. Most importantly, if they find that you failed to adequately secure the data in advance, you didn't have monitoring, or you didn't have the proper procedures or insurance, they're going to come in after the fact and cause consequences for your company.

So whether you're a large company or a small company, the rules are the same, and the after-event consequences can happen many, many years after the fact, and the penalties can be pretty high. How high? Well, let's take a look. According to the article, the violation for each order may result in a penalty of $50,000, and they can multiply that by the number of customer records that were breached. So be aware: the penalties can be very Draconian. You don't want to be in a place where you have very large consequences, whether regulatory or financial, and have no backup for them.