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Legal Facts: Ransomware is a Data Breach

Ransomware as a Data Breach 

Contrary to the prevailing notion that data isn't truly "stolen" during a ransomware breach, no organization subjected to such an attack can confidently confirm this assumption. Compliance regulations consequently require businesses to inform their clients in the event their data is potentially compromised. 

Many businesses, unfortunately, find themselves operating within a somewhat murky realm when it comes to breach disclosure. In this article, we discuss why straying into this ambiguous zone can have detrimental effects and why your business should opt for a comprehensive strategy that blends the finest elements of cybersecurity and compliance. 

Navigating Ambiguities 

A common perception among businesses is that not all ransomware attacks necessitate a disclosure since not every cybercriminal can decipher the data they've encrypted. These businesses theorize that hackers can gain the ability to decrypt, extract and exploit data only during advanced attacks, thereby necessitating the declaration of a breach. 

This viewpoint, however, presents two distinct dangers. Firstly, with the proliferation of a readily available ransomware as a service tool, even a novice hacker could catch your business off guard. Secondly, regulatory bodies interpret these situations differently. 

To illustrate, under HIPAA’s Privacy Rule, the U.S. Department of Health and Human Services has directed companies to presume that ransomed data contains Personal Health Information, even in “low probability” scenarios. Certain data breach notification regulations obligate businesses to inform customers about any "unauthorized access", regardless of whether any personal data was verifiably stolen. 

The Silence over Breach Admissions 

Admitting to a data breach is a challenging task for businesses given the severe financial and reputational repercussions. But there are further reasons behind the reticence. 

Challenges in Complying with Breach Notification Standards 

Despite its fundamental importance, numerous businesses struggle to comply with the global breach notification standards. If a business opts not to report a ransomware attack, failure to timely inform its customers can still incur severe penalties. 

Reputational Impact 

While it's possible to recover financially from the downtime resulting from a ransomware attack, rebuilding your reputation and restoring your customers' trust is often a long, laborious, and sometimes unsuccessful endeavor. This is a prime reason why businesses refrain from admitting a ransomware attack. 

Adopting a Comprehensive Approach 

While a foolproof strategy to avoid cybersecurity attacks, including ransomware, doesn’t exist, your business can demonstrate its commitment to preventing security breaches and data loss incidents. This dedication is what both compliance regulators and your stakeholders expect. The expectation is that your business proactively mitigates risk and manages post breach situations while abiding by applicable regulations. 

Let us assist you in proactively addressing all your cybersecurity and compliance requirements. By bolstering your cybersecurity infrastructure and ensuring regulatory compliance, we can help your business navigate the complex landscape of data protection, putting you ahead of potential threats and in a strong position to protect your clients' trust. Rest assured that your security is our top priority. 

Feel free to reach out to us for a consultation today!  


About the author

Erik V. Castle