Why Every Organization Needs an Effective Incident Response Plan (IRP)

The Strategic Edge: Why Every Organization Needs an Effective Incident Response Plan (IRP)

There is no doubt that the threat landscape has greatly expanded in recent years. According to the Identity Theft Resource Center 2023 Data Breach Report, 2023 saw a 72% increase in data breaches since 2021. Seventy-five percent of security professionals report seeing an uptick in attacks over the past year, with 85% attributing the rise to bad actors using generative AI. The reality is that as the probability of attacks continues to climb, so does the likelihood that your organization will need to respond to an incident. That is why a pre-established response strategy for potential attacks is paramount.

What are the Quantified Benefits of an IRP?

A cyberattack is an incredibly costly event. Direct costs include data recovery, legal fees, regulatory fines, credit monitoring services for affected individuals, potential ransom payments, and increased cybersecurity investments. Then there are indirect costs, some of which can prove even more substantial such as business interruption and downtime. Other indirect costs include reputational damage, decreased stock value and increased insurance premiums.

Given these significant financial risks, an incident response plan (IRP) is a prudent investment that can save money and potentially prevent bankruptcy. The 2023 IBM Cost of a Data Breach report underscores this point, revealing that organizations with incident response planning and testing reduced the average cost of a data breach by $1.49 million.

Rapid Response is Critical

Crime investigators stress that the first 72 hours of a missing person investigation are crucial, as this period offers the most valuable evidence and leads, with the chances of a successful outcome diminishing rapidly as time passes. The need for rapid response and proper investigation is similar in the event of a cyberattack. New York State just applied this same time window on state hospitals, requiring them to report any cyber incident to the New York State Department of Health no later than 72 hours after determining that an incident occurred.

When a cyberattack strikes, normal operations can be severely disrupted. Standard communication channels such as email or office phones may be compromised, leaving your organization in disarray. In this chaotic situation, having pre-determined priorities and action plans is crucial. An IRP can make the difference within those first critical hours after an attack.

How Do IRPs Mitigate Risks for Your Business?

Any digitally connected organization is constantly at risk of an attack, and the potential risks to your organization exponentially expand as soon as an attack is underway. A well strategized IRP will help mitigate your risk exposure in multiple ways:

• An IRP provides a structured approach for detecting, responding to, and recovering from cyberattacks, minimizing damage and incident duration.
• By outlining clear procedures, an IRP enables faster resumption of normal operations, reducing downtime and associated costs.
• It includes a plan for the rapid containment of an incident, thus limiting the spread of the attack and protecting systems and data from further exploitation.
• Assists with regulatory compliance as the IRP helps organizations meet regulatory requirements, avoiding legal penalties and maintaining customer trust.
• Regular testing and updating of the IRP ensure the organization stays ready to handle evolving threats effectively.

IRP Can Mean Reduced Insurance Premiums

When shopping for homeowners’ insurance, you’ll find that insurance companies offer discounts for various safety measures, such as home monitoring systems, fire-resistant construction materials, and the presence of fire extinguishers. Similarly, in the realm of cybersecurity, having a well-prepared Incident Response Plan (IRP) can lead to significant cost savings for organizations.

A 2022 Ponemon Institute study revealed the substantial financial benefits of having a tested IRP. Organizations with tested IRPs experienced $2.66 million lower data breach costs compared to those without such plans. This represents a 58% cost savings for organizations with formalized and tested IRPs over those lacking them. The concept is straightforward: A well-executed IRP can significantly reduce or prevent financial losses stemming from data breaches, system outages, and reputation damage. This enhanced risk management capability often translates into lower insurance premiums, as insurers recognize the organization’s improved security posture and reduced likelihood of costly claims.

An IRP Represents Reasonable Security

Legal challenges for organizations rarely arise from a cyberattack itself. Instead, they arise from a failure to enact reasonable security measures to stop an attack. Just about any class action suit involving a cyberattack will refer to the plaintiff’s lack of reasonable security measures.

Organizations that host the sensitive data of individuals have a duty of care to secure that information. A well-conceived and rehearsed IRP demonstrates a commitment to security best practices and helps meet regulatory requirements. By demonstrating due diligence through a well-crafted IRP, organizations can better position themselves to meet their duty of care obligations and potentially mitigate legal risks associated with data breaches.

Tailoring IRPs to Specific Threat Landscapes

Depending on your organization, you may be susceptible to more than one type of attack. Recognizing this, many companies are moving away from a one-size-fits-all approach to incident response. For instance, an IRP for handling data breaches will include steps for notifying customers and regulators, while a separate IRP for ransomware attacks might focus on isolating affected systems and negotiating with attacker. This multi-IRP approach allows organizations to respond more efficiently to various incidents, minimize potential damage and recovery time, ensure compliance with diverse regulatory requirements, and better prepare their teams for different types of cyber crises.

Getting it Right the First Time

You will only have one opportunity to get your response right for an attack. Your response will prove only as effective as the plan outlined in your incident response plan. That is why it is critical to bring in outside experts that have gone through the process of devising an IRP for all types of organizations. HALOCK helps organizations create a detailed roadmap to follow during security incidents. As part of the IRP creation process, their dedicated security teams can assess existing security solutions and configurations that could assist with incident response or investigations. They can also assist you in conducting tabletop exercises based on custom industry scenarios to ensure personnel are familiar with the IRP and understand their roles. Discover how HALOCK helps you devise the comprehensive IRP you need to protect your organization.