CIO's Guide to Responding to a Data Breach

Data breaches and identity theft are becoming an everyday threat that people and companies must worry about. As individuals and companies race to secure their data, hackers are devising new ways to steal it.

The Identity Theft Resource Center reported that the average cost of a data breach was $10 million in 2024. Now, more than ever, businesses must plan for the unexpected.

A data breach response plan can help companies prepare for a cyber-attack or other emergency. They can avoid losing valuable data, damaging their reputations, or losing revenue. A data breach can result in financial penalties, loss of business, reputational damage, and a decrease in consumer trust.

Is your business prepared to respond efficiently in the event of a data emergency? Find out what you need to keep in mind before, during, and after a data breach below.

What is a Data Breach? Understanding the Data Breach Response Plan

A data breach is the release of private, confidential, or secure information to an untrusted environment. Data breaches can be intentional and unintentional, and vary in severity.

One of the first steps when developing a data breach response plan is defining what your organization considers a breach. Advancements in data protection, such as AI, machine learning, and threat detection systems, are crucial for preventing breaches and safeguarding customer data.

You will need to decide what level of severity will set your plan in action. A minor breach (such as exposed information as a result of a phishing email) may not need a full-blown response. Attacks that cause a more serious disruption can also happen. These breaches may include widespread theft or exposure of sensitive data, such as personal or financial information. Learn more about the different social engineering attacks here.

How to Respond to a Data Breach

If a data breach happens at your organization, it’s essential to have a continuity plan in place ahead of time to contain the situation. A data breach response plan provides your business with a detailed set of instructions to follow in the event of a security breach.

An effective incident response is essential for minimizing damage and ensuring a swift recovery. The incident response team should be established with clearly defined roles and have the authority to act without needing to seek permission, enabling a faster response to the breach.

The plan should involve key team members from your organization. This includes IT departments, public relations and digital marketing teams, legal and risk compliance teams, as well as an executive sponsor. It is essential to include key team members from each area to ensure all aspects of the response are covered.

Set clear objectives and decide how each department will respond to a breach. A communication plan is also necessary to coordinate messaging during a breach and ensure consistent information is shared internally and externally. Test and revise the plan annually or biannually to ensure its relevance.

Once you discover and identify a security breach, the data breach response plan can be put into action. Your team members can then follow its steps to secure the situation and get the company back on track.

Preparation

Create a data breach response plan

An effective response plan includes steps designed to prepare your company for a cyber emergency. It should clearly identify the data breach response team, outlining their roles and responsibilities, such as members from IT, Legal, HR, Communications, and any necessary external experts. The plan also lists actions to contain and recover from the event.

The intricacy of the data breach response plan will depend on the size of your business. You must also consider the number of possible threats and the confidentiality of the information you store. If a cybersecurity breach has the potential to impact your business, your plan needs to be thorough.

You need to make key decisions ahead of time to avoid making them under pressure. All personnel involved with the plan should be well-informed and trained.

Choose teams in each department to identify and recover from the breach 

Choose teams in each department to identify, contain, and recover from the breach. Assign incident leads and ensure the correct IT resources are allocated to the most crucial aspects of the plan. Teams should include members who will handle customers comms, internal communication, public relations, and human resources to manage employee-related issues during the breach.

Ensure IT resources are allocated to the most crucial departments

Key departments to involve include:

• Information Technology – Discovers and responds to the data breach.
• Legal – Determines the data retention policies. Maintains compliance standards for records retention and informs the appropriate parties. Involving legal counsel at the outset can help ensure compliance with regulatory requirements during a breach response.
• Public Relations and Marketing – Leads customer identification and communications coordination efforts.
• Sales – Leads key relationship management.
• Business Partners and Vendors – Notifying business partners and vendors is crucial to mitigate potential fraud and comply with legal obligations in the event of a breach.
• Executive – Coordinates high-level response efforts.

Conduct company-wide awareness activities and drills annually

Company-wide awareness activities and drills are important to conduct annually or biannually. That way, nobody is caught off guard if a breach occurs. A few different types of cybersecurity drills include:

• Employee awareness of common security breaches
• Security awareness training sessions
• Simulating cybersecurity incidents or phishing scams
• Tabletop exercises
• Drills focused on the identification and documentation of suspected breaches

Prevention is a major aspect of preparation. Take stock of weak points in your company’s security measures. Consider potential ways data could be compromised — then take steps to ensure these areas are secure. If you can prevent the breach from happening, you’re one step ahead.

Identification

When developing a keyword-focused data breach response plan, it’s crucial to understand the difference between a security incident and a data breach.

A security incident refers to any event that may compromise the integrity, confidentiality, or availability of information systems. At the same time, a data breach involves the unauthorized access or disclosure of personal or confidential information. Not all security incidents result in data breaches, but all security incidents should be promptly identified and investigated.

To effectively protect sensitive data, organizations must monitor data flows and detect anomalies that could indicate unauthorized access or potential security breaches. Real-time vigilance and rapid response to anomalies are essential for maintaining business continuity and minimizing the impact of both security incidents and data breaches.

Identify what type of breach has occurred

You should have determined in advance what you consider a data breach. If a breach occurs, you will need to determine its severity and the best response plan.

What types of sensitive information does your company hold? Two types of data can be compromised in a data breach. When assessing the severity of the situation, it is essential to evaluate the extent of information compromised, as this will guide your response and notification obligations.

Incidents that involve legally protected information.

You often see this type of incident on the news. This includes customer health records and personal identification information (such as credit card numbers or social security numbers). The company is often legally required to provide timely breach notification to affected parties when a breach of this nature occurs, in accordance with breach notification laws.

In these cases, legal or outside counsel should identify required data retention and disclosure requirements. Different industries will have different reporting requirements. Some (such as retail and PCI compliance) must inform their customers. Others (such as healthcare and government) must inform the customers and governmental regulatory agencies. You will need to know which regulations apply to your business. There are legal obligations for breach notifications under various data protection laws, such as GDPR, CCPA, and HIPAA, which require notifying affected parties and regulatory authorities in a timely and compliant manner.

Incidents that involve a material loss to the company.

This type of data loss may not warrant a public announcement, but can be damaging to the company itself. Material losses manifest differently across industries. They can include a compromise of sensitive information, trade secrets, or intellectual property. In addition to financial consequences, such incidents can significantly harm a company’s reputation, making it crucial to communicate appropriately with customers to maintain their trust.

Material losses can also prevent your company from functioning correctly. For example, an operational disruption or a compromised vendor network could impact your supply chain.

Identifying the type of incident helps you decide the kind of action needed. It also helps determine which departments to involve. Train all employees on how to recognize and respond to an attack. Teach them how to escalate the incident internally and externally to set the plan in motion.

Investigation 

Identify the source of the breach

Once you contain the breach, your team should investigate its potential cause. Be sure to document all investigation and mitigation efforts carefully. Record all interviews with internal and external personnel and update legal teams often.

Alert the authorities and legal counsel 

If you need to call in outside help, now is the time. You will likely need to involve law enforcement, and depending on the nature of the breach, you may also need to notify local police. Consult with your executive leadership teams and legal counsel to determine any additional response teams needed.

Protect the digital evidence found

Include a detailed set of instructions and approved methods to protect any digital evidence. The response teams should continue to carefully watch the status of the breach. They can also ensure that more information is not compromised. This is important even after the breach

Containment & Recovery

Secure all data

Your recovery teams will need to take action to mitigate the impact of the breach as much as possible. This ensures that the data breach does not spread and all data is secured. During containment, review and update access controls to prevent unauthorized access to sensitive data and compromised accounts.

Change all passwords and encryption keys

Put all affected machines, devices, and systems on lockdown. Change any passwords or encryption keys immediately. As always, only use a trusted source and store this information securely.

Clear malicious code from your systems

If the breach involves any viruses or malicious code, allocate the necessary resources to remove them from your system. This way, the company can begin to recover. This is one situation in which it’s essential to have an effective backup strategy for your digital information. This kind of strategy can save you time and help you determine the best course of action.

For example, if data is breached with a ransomware attack, the most effective response is not to pay the ransom for the release of data. You should roll the IT state back to the most recent copy of the data, thus restoring its operational state. Data will still be compromised, but you will be able to analyze what was taken. You can also determine your next move and maintain operations.

Notify data owners about the breach

When you contain the breach and investigations are underway, you can put your restoration plan into action. You may need to notify affected individuals, such as customers or employees, that their information was compromised. Notify them as soon as possible so they can take the necessary steps to protect themselves from identity theft.

Taking it a step further, consider ways to make the situation right in the eyes of the victims. This means going beyond regulations and considering ethical steps your company can take to ensure the well-being of affected individuals.

You can pay for credit monitoring, an identity theft protection plan, or security software for the victims. This indicates that you are taking steps to address the issue rather than merely reporting it.

Activate public relations response teams (if needed)

If you need public relations teams, they should communicate quickly, clearly, and transparently. Effective communication strategies are essential for managing both internal and external messaging during a data breach. Be straightforward and honest when communicating what you know.

Identify and inform external stakeholders, such as regulators, insurance providers, law enforcement agencies, and business partners, to ensure all necessary parties are aware of and involved in the response. Establishing clear communication protocols helps maintain consistent messaging and ensures everyone understands their roles and responsibilities. Effective communication not only supports regulatory compliance but also helps protect the organization’s reputation during and after an incident.

The FTC has an excellent model letter template. It explains what happened and what information was compromised. It also outlines the measures the company has taken to prevent it and provides guidance on how users can protect themselves.

Learning Lessons 

Fix vulnerabilities to prevent another breach

After a security breach, your team should investigate what happened and address any vulnerabilities to prevent it from happening again. Determine whether to modify service provider access privileges for those involved.

You may choose to segment your network so that a future breach in one sector won’t expose sensitive information in another industry. Work with your team to identify the security weaknesses that made this breach possible. This can include reviewing logs and who had access to the appropriate information. Take the recommended measures to ensure networks continue to be secure. Implement advanced threat detection tools to enable real-time monitoring and rapid response to potential security threats.

Fact: Companies with proactive breach response strategies can save approximately $1.2 million compared to those without such strategies.

Ensure your teams are using the most up-to-date antivirus and Wi-Fi security protection software. Consider using a tool like Aura to protect your data and devices.

Alter preparation plans for potential future breaches

You will also likely want to review your data retention policies and adjust them. For example, you may only be required to maintain records of ex-customers for 3 years. Maintaining 10 years s unnecessarily exposes the company to more risk.

Your IT and compliance teams should collaborate to determine the minimum amount of customer or other data to retain. Remember that some industries are regulated, and in such cases, you must maintain specific data.

At this point, your prevention or preparation plans may need to be altered for potential future breaches. Do so with the knowledge gained from your investigation. Keeping response plans updated with lessons learned from previous incidents is essential for continuous improvement. It is also important to regularly review and test your data breach response plan to ensure it remains effective and compliant with industry standards.

Tips to Consider When Responding to a Data Breach

Several key factors should be considered when planning for a potential data breach.

You will want to ensure:

• Senior management is supportive. Support from all senior management teams is essential for the success of your response plan. They can help you gain access to information you may not have readily available and ensure that all departments are on board and well-informed.
• The plan is simple. Everyone should know their role, and there should be no confusion as to how to deploy the response strategies.
• Communication is continuous. Not only within the company, but also with those whose data has been compromised. Recovery will depend on the trust you gain during the incident.
• You review and test the plan often. You should be constantly looking for holes or discrepancies in the plan so that they can be fixed preemptively. The plan will be worthless if it is irrelevant or ineffective.
• Compliance with industry regulations and legal requirements. Regularly review your plan to ensure it meets current industry regulations and legal requirements, as non-compliance can result in significant penalties.
• Timely breach reporting. Your plan should include procedures for promptly reporting breaches to authorities and stakeholders, ensuring compliance with regulatory obligations, and maintaining transparency.
• Inclusion of third-party services. Ensure your response plan addresses third-party services, as these are often integral to your cybersecurity landscape and may be involved in a potential breach.
• Monitoring data flows. Track and monitor data flows within your organization to quickly detect anomalies and respond to potential breaches.
• Addressing unauthorized disclosure. Consider the risk of unauthorized disclosure, which involves the accidental or unlawful release of personal information, and understand its legal and security implications.

To sum things up, you can avoid many of the negative effects of a security or data breach by being prepared. Consequences can include loss of productivity and revenue, as well as damage to trust and reputation.

If your team remains flexible and agile during such disasters, you will achieve the best possible outcomes. Keeping this in mind, it’s never too early to start thinking about preparing for a data breach.