Data breach response: 8 steps to create a plan

Data breaches have become an all too common occurrence, with the potential to wreak havoc on a company's reputation, customer trust, and bottom line. In fact, the 2024 Cost of a Data Breach Report from IBM found that the global average cost of a data breach spiked 10% from the previous year to a staggering $4.88 million. 

Nearly half of these breaches involved the exposure of customer personally identifiable information (PII). These sobering statistics underscore the critical importance of not only working to prevent data breaches, but also having a well-defined response plan in place for when the inevitable occurs.

What is a data breach?

Before diving into the specifics of crafting a response plan, let's clarify exactly what constitutes a data breach. 

In simple terms, a data breach is an incident in which sensitive, protected, or confidential information is exposed or obtained in an unauthorized manner. It also involves unauthorized access to systems even without data being exfiltrated, which can still pose a risk.

A data breach can include a wide range of data such as:

• Customer PII (names, emails, addresses, etc.)
• Employee PII
• Intellectual property
• Financial information
• Protected health information (PHI)

Data breaches can take many forms, but some of the most common include:

• Malicious insider attacks: This involves a rogue employee or contractor with legitimate access intentionally stealing, altering, or exposing sensitive data for personal gain or revenge. The IBM report found these cyber attacks to be the costliest, averaging a whopping $4.99 million per breach.
• Lost or stolen devices: In our increasingly mobile world, employees frequently work on laptops, tablets, and smartphones that contain sensitive company data. If one of these devices is lost or stolen and not properly encrypted, that data becomes vulnerable.
• Phishing and stolen credentials: These devious attacks trick unsuspecting employees into revealing their login credentials through fake emails and websites that appear legitimate. Once hackers gain these credentials, they can access sensitive systems and data. According to the Verizon Data Breach Investigations Report (DBIR) 2024, the use of stolen credentials is the #1 initial action taken leading to data breaches.
• Third-party and supply chain breaches: Many organizations share data with outside vendors, partners, and service providers. If any of these third-parties suffer a breach, your own data could be exposed. 

The importance of data breach response plans

In the aftermath of a data breach, every second counts. How quickly and effectively an organization reacts can make all the difference in minimizing damage. That's where having a comprehensive data breach response plan becomes invaluable. A well-crafted plan provides a number of key benefits:

Quicker identification and containment

One of the most critical steps in the face of a breach is identifying the intrusion and containing it as quickly as possible to prevent further data loss. With clearly defined roles, responsibilities, and procedures, organizations with robust response plans are able to:

• Detect breaches faster
• Contain intrusions more effectively
• Recover data and systems quicker
• Coordinate response efforts efficiently
• And minimize overall damage and costs.

Reduced financial losses

Between lost business, regulatory fines, legal fees, and remediation efforts, the financial impact of a data breach can be crippling. The longer a breach goes unaddressed, the more costly it becomes. Being prepared and reacting swiftly can make a huge difference in the overall financial blow.

Improved regulatory compliance

Most industries today face strict data protection regulations such as HIPAA in healthcare, GDPR in the EU, and CCPA in California. These laws carry severe penalties for non-compliance, with GDPR fines reaching as high as €20 million or 4% of a company's global annual revenue. 

A core component of these regulations is the requirement to notify authorities and impacted individuals within a specific time frame after discovering a breach. Response plans ensure you stay compliant with these stringent notification rules to avoid additional fines and legal action.

Preserved customer trust

Perhaps the most devastating consequence of a poorly handled data breach is the loss of customer trust and loyalty. When customer data is exposed, they expect a swift, transparent, and reassuring response from the organization. If that doesn't happen, customers will quickly take their business elsewhere. Having a plan to competently manage the response and support impacted customers can go a long way in preserving their trust and mitigating loss.

How to create a data breach response plan

Developing an effective data breach response plan is not a one-person or one-department job. It requires close collaboration between multiple functions including IT, security, legal, HR, public relations, and executive leadership. 

Key stakeholders from each of these areas must align on critical elements of the plan such as:

• Formal definition of what constitutes a data breach
• Roles and responsibilities of the response team
• Internal and external communication protocols
• Technical investigation and containment procedures
• Legal and regulatory requirements
• Remediation and prevention steps
• Testing and refining the plan regularly

While the specific contents of a response plan will vary by organization, there are some core components that every plan should include:

• Clear activation triggers: The plan should spell out exactly what events or indicators should trigger the formal data breach response process. Common trigger events can include unusual login activity, large unexplained data transfers, malware infections, system performance degradation, or direct alerts from cybersecurity monitoring tools. Defining these triggers upfront ensures a swift response when they occur.

• Comprehensive contact list: When a breach happens, time is of the essence. Having an up-to-date contact directory for both the internal response team members and relevant external parties is critical. This should include after-hours personal phone numbers and backup contacts for each key role. 

• System and data inventory: To efficiently assess the scope and severity of a breach, the response team needs a clear picture of what data resides where. The plan should include a comprehensive inventory of all data assets, network diagrams, data flow maps, and access control lists. This allows quick identification of which systems/data have been compromised and who may be affected.

• Containment and eradication procedures: A crucial component of the plan is a clear technical process to contain the breach, prevent further data loss, and remove the intruder's access. This can involve everything from isolating affected systems, resetting passwords, and blocking malicious network traffic to deploying security patches and rebuilding compromised servers. The plan should provide a checklist of these containment steps and the tools needed to accomplish them.

• Remediation and prevention measures: Beyond just stopping the immediate breach, the plan must include steps to remediate the impacts and implement safeguards against future incidents. This may encompass providing identity theft monitoring to affected customers, mandatory employee security training, enhancing system monitoring tools, or updating data security policies. There should also be a process defined to analyze the root causes that allowed the breach to occur and address those specific vulnerabilities.

Data breach response: 8 essential steps 

While the specific details may differ, there are 8 fundamental steps every organization should follow when responding to a data breach:

Step 1: Confirm and declare the breach

The moment signs of a potential security breach are detected, the first step is to quickly investigate and confirm an actual incident has occurred. Common indicators can include alerts from intrusion detection systems, reports of suspicious network activity from employees, or customers complaining about unauthorized account access. Once the response team has enough evidence to verify sensitive data was compromised, they should officially declare an incident and initiate the response plan.

Step 2: Contain the data breach

After declaring an incident, the immediate priority is to contain the breach and prevent any further data exposure. The specific technical steps will vary based on the nature of the breach but often include isolating affected systems by disconnecting them from the network, resetting user and system passwords, suspending compromised accounts, and blocking malicious IP addresses. Speed is critical in this phase.

Step 3: Assess breach severity and scope

Once the bleeding has been stopped, the focus shifts to conducting a thorough investigation to determine the full scope and impact of the breach. Engage experts to determine exactly what data has been exposed, how many records are impacted, and if the data is being actively misused. Classifying the severity level is key to determining the appropriate response steps and notification procedures.

Step 4: Fix the vulnerabilities

The investigation process will likely uncover vulnerabilities in systems, software, devices, or security controls that attackers exploited to gain unauthorized access. As the entry point and methods are uncovered, take swift action to close those holes. This could mean patching software, updating firewall rules, fixing misconfigurations, resetting compromised credentials, or strengthening monitoring.

Step 5: Notify appropriate parties

One of the most important and delicate steps is determining who needs to be notified about the breach and how those communications should be carried out. Disclosure requirements will hinge on the type of data compromised and the applicable national and regional regulations. Common parties that may need to be notified include:

• Impacted customers
• Affected employees
• Board of directors
• Business partners and vendors
• Media outlets
• Law enforcement
• Government regulators

Work closely with legal counsel to understand the relevant breach reporting laws and ensure all mandatory notifications occur within the required timeframes.

Step 6: Provide support for impacted parties

Beyond notifying affected individuals, breached organizations must also provide them with adequate support and protection. Set up assistance for impacted customers and employees such as identity theft monitoring, credit checks, a toll-free information hotline, and FAQs on your website. Show empathy and make the remediation process as smooth as possible for those affected.

Step 7: Conduct root cause analysis

With the breach contained and recovery efforts underway, it's time to shift to determining exactly how and why it happened. A comprehensive root cause analysis should examine both the specific technical vulnerabilities that enabled the attackers to gain entry as well as the overarching security gaps and process failures that allowed those vulnerabilities to exist in the first place. Identifying these deep-rooted issues is an actionable step towards preventing similar breaches in the future.

Step 8: Incorporate lessons learned

The last step in the response process is perhaps the most important for the long-term security of the organization. It's critical to take the findings from the root cause investigation and translate them into concrete corrective actions. Develop a prioritized plan to address the identified issues. Depending on the specific findings, action items could include:

• Expanding employee security awareness training programs and phishing simulations
• Implementing stricter password policies and multi-factor authentication (MFA) across all systems
• Deploying or updating endpoint detection and response (EDR) and security information and event management (SIEM) tools
• Strengthening software patch and configuration management processes
• Updating data backup and recovery procedures to minimize operational downtime
• Revising incident response plans and conducting more frequent tabletop exercises

The key is to treat the breach as a learning opportunity and use it as a catalyst to drive meaningful improvements in the organization's security posture.

Tips for data breach prevention

While it's critical to have a robust response plan, preventing breaches in the first place is always the best approach. Here are some key tips for minimizing your breach risk:

• Encrypt sensitive data: Encrypting data both at rest and in transit renders it unreadable even if attackers do get access. Use industry standard encryption algorithms and key management practices.
• Use MFA: Requiring multiple forms of identity verification, such as a password plus a code texted to a mobile device, makes it significantly harder for attackers to utilize compromised credentials.
• Minimize data access: Operate on the principle of least privilege, only giving users access to the data they absolutely need for their role. Regularly audit permissions and prune unnecessary access.
• Secure remote connectivity: With remote and hybrid work now the norm, ensure all remote system access occurs over a properly configured virtual private network (VPN) and all remote devices utilize endpoint security software.
• Train employees continuously: Humans remain one of the weakest links in cybersecurity. Invest in engaging, continuous training on topics like spotting phishing attempts, proper password hygiene, and handling sensitive data to turn employees into a strong first line of defense.

Secure business data with Rippling

To further minimize the risk of data breaches, many organizations are turning to advanced identity and access management platforms like Rippling. 

Rippling provides a comprehensive solution for securely managing your workforce's devices, applications, and data access. Key security features include:

• Automated device management to ensure all laptops, smartphones, and tablets are properly configured and secured
• Single sign-on (SSO) and MFA to protect user accounts
• Customizable security policies to enforce best practices like disk encryption
• Real-time monitoring to detect and remotely disable compromised devices
• Automatic offboarding to immediately revoke access when employees depart

By unifying all your workforce's identity and access needs in one system, Rippling dramatically reduces complexity and the potential for human error that can so often lead to breaches. 

Frequently asked questions

What is the first step in data breach management?

The first step is to assemble the cross-functional response team and confirm a breach has occurred. Acting quickly to declare an incident and activate the response plan is critical.

What must a company do after a data breach?

After a breach, companies must identify and contain the intrusion, investigate the scope of data exposure, fix vulnerabilities, and notify all impacted parties which may include customers, employees, partners, law enforcement, regulators, and others. They must also provide remediation support for those impacted.

What are the 4 types of incident response plans?

The 4 main phases of incident response according to the NIST framework are:

1. Preparation
2. Detection and Analysis
3. Containment, Eradication, and Recovery
4. Post-Incident Activity

What is the data breach lifecycle?

The data breach lifecycle encompasses the amount of time between when a breach first occurs to when it is contained. The average lifecycle in IBM's report was 258 days—194 days to detect the breach and 64 days to contain it. Reducing this lifecycle is a top priority in breach response.

This blog is based on information available to Rippling as of October 3, 2024.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.