A cyber incident—whether it’s a data breach, ransomware attack, or unauthorized access—can cause significant financial and reputational damage for small and mid-sized businesses (SMB). Taking proactive measures before an incident occurs, knowing how to respond during a breach, and effectively recovering afterward can make all the difference in minimizing risk and ensuring business continuity. This guide outlines the critical steps business owners must take before, during, and after a cyber incident.
Before a Cyber Incident: Proactive Preparation
1. Establish a Cyber Incident Response Team
Having a dedicated response team in place ensures that the business can act quickly when a breach occurs. This team should include:
- Incident Response Lead: Oversees the entire response process, ensures communication across teams, and coordinates efforts.
- Legal Counsel: Provides guidance on compliance obligations and regulatory reporting.
- IT and Cybersecurity Lead: Assesses the breach, contains threats, and coordinates with external cybersecurity professionals if needed.
- Public Relations (PR) or Communications Lead: Manages messaging to employees, customers, and stakeholders.
- HR Representative: Addresses internal concerns and ensures employee-related security policies are followed.
- Finance Representative: Evaluates financial impact, including cyber insurance claims and business losses.
A well-structured response team ensures a coordinated and efficient response, reducing downtime and mitigating damages.
2. Develop a Documented Incident Response Plan
A well-documented response plan streamlines decision-making during a crisis, minimizing costly mistakes that could lead to legal liability and compliance issues. Ensure the plan includes:
- Step-by-step response protocols.
- Roles and responsibilities of employees and cyber response team.
- Contact information for IT providers, legal counsel, and cyber insurance representatives.
3. Conduct Tabletop Exercises
Tabletop exercises allow organizations to test their disaster recovery (DR) strategies before a real incident occurs. They are simulated, discussion-based drills where key members of the incident response team walk through a hypothetical disaster scenario to assess preparedness, identify gaps, and improve response coordination.
Organizations should conduct tabletop exercises at least annually to stay prepared and aligned with best practices. Semi-annually or quarterly drills are advised for high-risk organizations such as healthcare, finance, government, or organizations with frequent updates to their infrastructure, policies, or personnel.
4. Invest in Employee Cybersecurity Training
Human error is a major cause of cyber incidents, contributing to approximately 82% of breaches, according to the 2022 Verizon Data Breach Investigations Report. Common mistakes include weak passwords, falling for phishing scams, and mishandling sensitive data. Regularly train employees on cybersecurity best practices, including phishing awareness, password management, and recognizing social engineering tactics. Businesses that implement ongoing security training reduce their risk of a breach by as much as 70%, highlighting the importance of a well-informed workforce.
5. Implement Strong Cybersecurity Measures
Preventative security measures can reduce the risk of an incident. Key actions include:
- Enforce Multi-factor Authentication (MFA): MFA ensures that access to sensitive systems requires multiple verification steps, significantly reducing the risk of unauthorized access.
- Maintain Up-to-date Firewalls and Next-generation Antivirus Protection: Advanced security measures such as NGAV and threat detection can detect and prevent malicious activities before they cause harm.
- Conduct Regular Vulnerability Assessments and Penetration Testing: Studies indicate that organizations that conduct frequent vulnerability assessments and penetration testing reduce their risk of a cyber attack by up to 67%, according to a report by the Ponemon Institute. Regular assessments help businesses identify security gaps and mitigate potential threats before they can be exploited.
- Establish Documented Cybersecurity Policies: Clearly defined security policies ensure employees understand their responsibilities in protecting company assets. These policies should cover acceptable use of technology, password management, incident reporting, and remote work security guidelines.
- Use Strong Passwords and a Password Manager: Weak and reused passwords are a leading cause of cyber breaches. Implementing strong password policies—requiring a mix of upper and lowercase letters, numbers, and special characters—reduces risk. A password manager can help employees securely generate and store unique, complex passwords.
6. Test and Verify Backups
Having backups is crucial, but ensuring they work when needed is just as important. Businesses should:
- Perform Regular Backup Tests: Periodically test backups to confirm data integrity and restoration capabilities.
- Store Backups Securely: Keep offline or cloud backups secure from potential ransomware attacks.
- Develop a Backup Recovery Plan: Establish a clear plan to restore systems efficiently in case of a cyber incident.
Regular testing ensures that the organization can quickly restore critical systems and maintain business continuity in the event of a ransomware attack or data loss.
7. Obtain Cyber Insurance Coverage
Cyber insurance can help mitigate financial losses associated with a breach. Ensure your policy covers data breaches, ransomware, business interruption, social engineering, and liability claims. Partner with an insurance broker who specializes in cyber insurance and understands what businesses need to be fully protected. Download our comprehensive cyber insurance checklist HERE. https://info.mis-solutions.com/2022-tech-exchange-resources
During a Cyber Incident: Immediate Response Steps
8. Contain the Breach
The first priority is to limit the damage by isolating affected systems. Business owners should:
- Disconnect compromised devices from the network.
- Disable breached accounts and change passwords.
- Shut down remote access if it was exploited.
9. Contact IT and Cybersecurity Experts
Seek immediate support from your IT provider or a cybersecurity firm. They will conduct an initial assessment and determine how the breach occurred. While it may be tempting to rush into restoring systems to resume operations, businesses must be careful not to contaminate crucial forensic evidence. Preserving logs and system data is essential for a thorough investigation and regulatory compliance.
10. Consult with Legal Counsel
Cyber incidents often have legal implications. An attorney specializing in cybersecurity law can guide business owners on:
- Compliance obligations under GDPR, HIPAA, or CCPA.
- Proper handling of breach notification requirements.
- Protecting attorney-client privilege during the investigation.
11. Notify Your Cyber Insurance Provider
Timely reporting of the incident to your insurance provider ensures access to coverage benefits and expert guidance on forensic investigations and financial recovery. Your insurance provider will be able to coordinate with your IT provider and legal counsel to ensure your policy is not voided because of a post-incident misstep.
After a Cyber Incident: Recovery and Strengthening Security
12. Work with a PR or Crisis Communications Team
If the breach is public or impacts customers, business owners should prepare a transparent and reassuring communication strategy to maintain trust.
13. Notify Affected Parties
Depending on regulatory requirements, businesses may be required to inform:
- Customers, employees, or partners whose data was compromised.
- Industry regulators or law enforcement agencies.
- Credit monitoring services for affected individuals.
Legal counsel will be able to guide you in what your responsibilities are post incident.
14. Restore Operations and Secure Systems
To resume business safely:
- Restore data from clean backups.
- Ensure patches and security updates are applied to prevent reinfection.
- Increase monitoring for further suspicious activity.
15. Conduct a Post-Mortem Analysis
A thorough review of the incident helps business owners identify gaps and prevent future breaches. Key steps include:
- Evaluating response effectiveness.
- Updating the incident response plan based on lessons learned.
- Strengthening cybersecurity policies and training programs.
Common Mistakes Business Owners Make After a Cyber Incident
Rushing to Wipe and Restore Systems
In an effort to get back to normal operations quickly, businesses often delete critical forensic evidence. Instead, they should work with experts to investigate and document the incident before restoring systems.
Referring to the Incident as a ‘Breach’
It is important for businesses to be mindful when referring to a cyber incident as a “breach.” The term “breach” has legal and regulatory implications that may trigger specific reporting obligations under laws such as GDPR, HIPAA, or CCPA. Prematurely labeling an incident as a breach before a full investigation is completed could have unintended legal consequences. Instead, businesses should work closely with legal counsel and cybersecurity experts to properly assess the situation before making official statements.
Poor Communication with Stakeholders
Mishandling communication, either by downplaying the incident, providing unclear information, or failing to address affected parties’ concerns, can erode trust. Crisis communications should be part of any organization’s Incident Response Plan. Legal counsel can guide you on what should be communicated and when.
Winging the Incident Response Without Prior Preparation
Failing to have a documented and tested incident response plan can lead to confusion, delays, and increased damage. Trying to wing it while in the throes of an incident can have a devastating impact on businesses. Preparation is key to successfully navigating cyber events.
Trying to Pull Together a Last-minute Team to Manage the Crisis
Businesses should have a team ready to respond, both internally and externally, including an IT provider, cyber insurance provider, and legal counsel. Waiting until the house is on fire to assemble a team of cybersecurity “first responders” will result in gross mismanagement and possibly cause further damage.
Conclusion
A cyber incident can be a devastating event for any SMB, but taking proactive steps before, acting decisively during, and improving security afterward can significantly minimize the damage. Business owners should ensure they have an incident response plan, maintain strong cybersecurity measures, and invest in employee training to prevent breaches. If an incident does occur, quick containment, legal compliance, and transparent communication will help protect the business’s reputation and financial health.
If you’re unsure about your company’s cyber resilience, consider conducting a cybersecurity audit or consulting with experts to assess your risk level and preparedness.