The digital age brings many benefits, but it also brings risks. These ‘cyber-risks’ can have far-reaching consequences. It is not just about the financial consequences, but also about the security, reputation and even the continuity of your organisation; it can affect its services and even your customers.
Most companies are now heavily dependent on ICT (including that of suppliers and customers), data and reliable (internet) connections for their business processes. You are probably well familiar with the normal risks to which your ICT is exposed, such as fire, explosion, induction, power cuts or material damage to computers, and have undoubtedly taken preventive measures or insured against them. Cyber-risk, however, is increasing: financial loss incurred by an organisation, directly or indirectly due to ICT systems, without material damage being involved.
The new Data Leaks (Duty of Notification) Act came into force on 1 January 2016. Organisations that fail to fulfil this duty of notification may be confronted with an administrative fine imposed by the Personal Data Protection Board. In addition, the European Commission is working on new data protection rules, which are expected to come into force in 2018. This European Privacy Regulation will oblige you to give your data maximum protection. Failure to conform to these laws and regulations can result in substantial fines. As well as a duty of notification, the regulations also give guidelines for the quality of the measures to be taken in response to a cyber-incident. Good preparation is therefore essential.
Apart from any fine imposed, cyber-risks can also cause direct financial loss due, for example, to business interruption, loss of data, legal expenses, forensic investigation, and blackmail through hijacking of your systems. Indirect financial loss can also arise from a cyber-incident if it causes loss by a third party and the latter holds you liable for (for example) breach of privacy, misuse of personal data, damage to systems or infringement of intellectual property.
For more information, contact one of our specialists: Imco Struiksma or Peter de Koning on +31 (0)72 5414151.