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In Cybersecurity– A Good Offense is the Best Defense

2021 has been a watershed moment for cybersecurity incidents, as cybercrime has become a frequent headline, and cyber criminals have thrived on unsuspecting and/or unprepared businesses and institutions. For example, the Solar Winds attack exposed sensitive data from top companies like Microsoft as well government agencies[1], and the Colonial Pipeline attack substantially disrupted the petroleum supply chain[2]. We have seen an almost 20% increase in data breaches and attacks since last year.

Changing Laws and Expectations:

In response to these threats, President Biden issued an executive order in May 2021 to overhaul the federal regulations governing cybersecurity policies that are applicable to government agencies and federal contractors. This is only a first step; it is likely that states will implement similar policies.

In the private sector, larger companies such as financial firms and healthcare organizations have already implemented mechanisms to protect sensitive business, customer, and patient data, given compliance regulations and requirements. While large companies may be ahead of the curve, many are still unprepared given the sophisticated and ever-changing cyber security landscape.

For small and medium sized businesses (SMBs), the challenges are even greater. The U.S. National Cyber Security Alliance found that 60% of small businesses went out of business within six months of a data breach or cyber security attack. Moreover, many SMBs contract with the government and/or larger corporations, which are increasingly shifting the risks of data breaches and cyber security attacks onto smaller entities through indemnity provisions in their contracts. Therefore, SMBs often face significant first-party and third-party risks.

SMBs often believe they are not targets because of their size. A 2019 Cyberthreat Study found that 60% of senior SMB decision makers believed that they were unlikely to be attacked[3]. On the contrary, SMBs are easy marks for cybercriminals because their systems are data-rich and vulnerable. While 62% of cyberattacks hit SMBs in 2020, only 43% had any type of cybersecurity defense plans. It’s likely that these numbers only grew worse in the last few years given the number of employees working remotely.

Protect yourself and remain compliant:

So, the question is what can SMBs do to protect themselves? To begin with, SMBs should implement proactive solutions to prevent attacks and safeguard data such as:

  • initiating employee cybersecurity training;
  • preparing or updating policies and procedures governing information security practices;
  • instituting managed and monitored patching; and
  • implementing multi-factor authentication (MFA).

These are basic steps that can help minimize these risks. Additionally, SMBs should consider sitting down with legal counsel and their insurance broker to evaluate first-party and any third-party risks in the event of a data breach or cyberattack.

Get covered:

One of the most effective ways to mitigate your risk to a cyberattack is to obtain cyber insurance coverage. Cyber insurance is not one-size fits all. Cyber coverage needs to be tailored to your business and to the risks in your business. Otherwise, a cyber policy may provide little to no coverage for first-party or third-party harm in the event of a breach.

For SMBs with existing cyber coverage, you should expect to see premium increases of between 60-100% of your current premiums given the rising incidents. For SMBs that have no implemented MFA, monitored patching, or compliance and training programs, your premiums could go up even higher. Many underwriters may reduce coverage or even cancel existing coverages if technical and compliance policies, like those noted above, have not been implemented.

For SMBs without cyber coverage, you should consider discussing coverage with your broker before your upcoming renewal. Insurance companies are implementing stringent underwriting requirements for cyber coverage, which will require the implementation of technical and compliance policies.

As we move into 2022, SMBs should examine their existing systems, policies, and insurance coverages to ensure that they are protected if and when a cyberattack or data breach occurs.

If you have any questions about whether your cybersecurity risks, and whether your business is protected, please contact BMD’s Cybersecurity Practice Leaders, Kyle Johnson at kajohnson@bmdllc.com or Brandon Pauley at btpauley@bmdllc.com.

[1] https://www.businessinsider.com/solarwinds-hack-explained-government-agencies-cyber-security-2020-12

[2] https://www.bloomberg.com/news/articles/2021-06-04/hackers-breached-colonial-pipeline-using-compromised-password

[3] https://www.keepersecurity.com/assets/pdf/2019-CybersecuritySMB-Infographic-branded.pdf

Protections Under Federal and Ohio Law for Bona Fide Prospective Purchasers of Contaminated Property

Most industrial/commercial property developers are generally aware of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), often also referred to as “Superfund”. CERCLA, a United Stated federal law administered by the U.S. Environmental Protection Agency, was created, in part, because the U.S. Environmental Protection Agency recognized that environmental cleanup could help promote reuse or redevelopment of contaminated, potentially contaminated, and formerly contaminated properties, helping revitalize communities that may have been adversely affected by the presence of the contaminated properties. Commercial property developers should be aware that CERCLA provides for some important liability limitations for landowners that own contaminated property impacted by materials hazardous to the environment. It can also assist with landowners concerned about the potential liabilities stemming from the presence of contamination to which they have not contributed. In particular, CERCLA provides important liability limitations for landowners that qualify as (1) bona fide prospective purchasers (BFPPS), (2) contiguous property owners, or (3) innocent landowners.

Puerto Rico Is Open For Business

Puerto Rico has the highest vaccination in the nation. More than 73% of the total population is fully vaccinated. The U.S. national average is just over 57%. The ports opened in June 2020 and San Juan held it first live concert this past summer. It is important to remember that Puerto Rico is a U.S. territory and there is no need for visas, the banking systems is almost identical to the mainland and the Island uses the U.S. postal service and U.S. dollar as its currency. There are thousands of flights from the U.S. to Puerto Rico daily and all main airlines fly to the Island.

Ohio Medical Board Changes Telemedicine Rules

A SCMS News Article by Scott Sandrock.

The Rising Threat from Insiders – Get Your House in Order

As its name implies, an ‘Insider Threat’ originates inside an organization. An ‘insider’ is any person who has or had authorized access to or knowledge of an organization’s resources, including personnel, facilities, information, equipment, networks, and systems. ‘Insider threat’ can manifest from malicious, complacent, negligent or unintentional acts that negatively affect the integrity, confidentiality, and availability of the organization, its data, personnel, or facilities. Certainly, ‘Insider Threat’ can be an activity by a bad actor employee, but can also arise from an inadvertent or unknowing action inside an organization (such as an employee who unintentionally opens a phishing email or clicks on a malicious link).

Changes to Medicare’s Physician Fee Schedule and Outpatient Prospective Payment System

Come the beginning of 2022, both the Medicare Physician Fee Schedule (“MPFS”) and Outpatient Prospective Payment System (“OPPS”) will look a little different. As a refresher, the MPFS lists the fees associated with reimbursement of services to providers at certain facilities, taking into account geography and costs. By contrast, OPPS sets reimbursement rates for hospitals and community mental health centers for outpatient services, which are determined in advance. A summary of some of the more pertinent changes to each rule will be outlined below.