CongressBipartisan Group of Senators Introduce Cyber Incident Notification Act of 2021

Bipartisan Group of Senators Introduce Cyber Incident Notification Act of 2021

On Wednesday July 21, 2021, Sens. Mark Warner (D-VA), Marco Rubio (R-FL), and Susan Collins, (R-ME) introduced the Cyber Incident Notification Act of 2021 (CINA). 

Under CINA, federal agencies, federal contractors, and critical infrastructure companies (Covered Entities) would need to notify the Cybersecurity and Infrastructure Security Agency (CISA) within twenty four hours of discovery of a cyber intrusion or a potential cyber intrusion.  Moreover, under CINA, Covered Entities would need to provide regular seventy two-hour updates to CISA until the cyber intrusion has been mitigated.

Covered Entities who report to CISA under CINA will be afforded certain protections regarding their reports, including the report not being admissible as evidence into any resulting criminal or civil actions and being exempt to subpoenas, except for those directly coming from Congress.

CINA provides that Covered Entities who fail to report a cyber intrusion to CISA are subject to penalties determined by the Administrator of the General Services Administration (GAO), including but not limit to removal from Federal Contracting Schedules.  Additionally, CINA also provides that Covered Entities who fail to report cyber intrusions to CISA may be “subject to financial penalties equal to 0.5 percent per day of the entity’s gross revenue from the prior year.”

Beckage closely monitors changes in laws governing cybersecurity incidents and breaches of system security, including those which affect government contractors and suppliers.  Beckage’s team of attorneys and technologists are especially entuned with both responding to a data breach and understanding what a robust cybersecurity program would entail.  Beckage will continue to monitor CINA as it makes its way through the Senate and an update accordingly.

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Cybersecurity Map of United StatesCISA Cybersecurity Advisory – Chinese State-Sponsored Cyber Operations

CISA Cybersecurity Advisory – Chinese State-Sponsored Cyber Operations

On July 19th, the National Security Agency, Cybersecurity and Infrastructure Security Agency (CISA), and the Federal Bureau of Investigations (FBI) released a joint cybersecurity advisory pertaining to Chinese state-sponsored threat actors. The advisory warns of potential malicious activity targeting “U.S. and allied political, economic, military, educational, and critical infrastructure (CI) personnel and organizations.”  

In response to this increased threat, CISA suggests organizations, particularly managed service providers, semiconductor companies, the Defense Industrial Base (DIB), universities, and medical institutions, take the following steps: 

Patch your systems as soon as you can after the release of operating system and application patches.  Updates are often quickly reverse-engineered by threat actors to determine the vulnerability that is being fixed and whether it can be weaponized. 

Employ monitoring and detection technologies give you a 360-degree view of what is happening on your network.  Be sure you can see lateral movement, which may show indicators of compromise, inside-out traffic to malicious hosts, which may indicate command and control communication, and outside-in communication, which could reflect attempts at compromise from external sources.   

Implement strong preventative measures to mitigate or help prevent compromise from occurring.  These include active anti-virus and multi-factor authentication. 

Read the full cybersecurity advisory issued by CISA here. While this alert focuses on businesses that would be potential targets for nation-state threat actors, the advice above is applicable to any business. Following these best practices does not guarantee the prevention of a security incident but can make it substantially more difficult for threat actors to gain a foothold in an organization’s network and systems and can reduce detection time. 

If you suspect any malicious activity in your systems, or would like to speak to an incident response attorney to help improve your organization’s security, Beckage attorneys can be reached 24/7 via our Data Breach Hotline: 844.502.9363 or IR@beckage.com.  

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5GWith 5G, will your thermometer need malware protection?

With 5G, will your thermometer need malware protection?

5G is perhaps the biggest critical infrastructure build the world has seen in twenty-five years.  It will allow for the connection of millions of Internet of Things (“IoT’) devices.  However, with these added benefits comes related vulnerabilities and cybersecurity risks. 

What are the specific cybersecurity risks are associated with the 5G network?

First, the 5G network itself can pose many security risks.  The 5G infrastructure is built using many components, each of which may be corrupted through an insecure supply chain.  Significantly more software is being used allowing for more entry points and more potential vulnerabilities.  Similarly, more hardware devices are required (cell towers, beamforming devices, small cells, etc.), and each one of these hardware devices must be adequately secured.  Small, local cells may be more physically accessible and therefore subject to physical attack.  Further, 5G will be built, in part, on legacy 4G LTE components – which themselves can have vulnerabilities.

Second, with specific focus on IoT devices, cybersecurity protections will need to become much more granular and more capable of being deployed on less intelligent “Things.”  Historically, one could think of a Thing as a device that can be connected to a network, but which lacked sufficient processing power to handle more advanced computations.  Things are “dumb.”  By connecting a processor, we could make such dumb Things “smart.”  These new smart IoT devices are interesting vectors of attack by malicious actors and further confound overall cybersecurity programs.  The ability to detect a cyber attack on a light bulb will require additional cybersecurity solutions.

Finally, with 5G facilitating the implementation of more IoT devices, more sensitive data may be stored requiring the need to protect edge computers servicing the IoT device.  If we consider the ubiquity of thermometer scanning now and how those and similar IoT devices could easily become part of 5G, then we begin to understand the seemingly exponential possibility for threat vectors on our networks.  We may have sensitive data (Am I sick?  What time do I show up for work?) and we may have the concern that a malicious actor may look to infect a network through a Thing. Will thermometers need malware protection?  More devices arguably allow for more places for a hacker to attempt to attack and thus the possibility of a greater availability of distributed denial of service (DDOS) attacks.  There were reports of Things being used collectively to deny service with the LTE network.  With 5G, the concept of an army of coffee makers attacking by all issuing a request to an address will become a greater possibility and manufacturers could be liable to other parties if their insecure Things are used to deny the service of someone else.

Regardless of the attack vector, incident response practices are universal, and Beckage’s Incident Response Team can help prepare your team from IoT and other attacks.

What potential solutions are available to mitigate this risk?

Companies looking to incorporate 5G should partner with experienced tech counsel who can assist by reviewing contracts, conducting risk assessments, and evaluating and updating incident response plans and procedures to account for any additional risks associated with 5G.

In addition, there are already some attempts at governmental solutions.  In March 2020, President Trump issued a National Strategy to Secure 5G – requiring, in relevant part, that the Unites States must identify cybersecurity risks in 5G.

The CISA (Cybersecurity & Infrastructure Security Agency) also issued some documents relating to the security of 5G.  Similarly, we are seeing a push for international standards and certain untrusted companies have had their products banned from use.  The Federal government is using regulations to limit the adoption of equipment that may contain vulnerabilities.

So, what is the solution?  The same as always.  Innovation.  Businesses are encouraged to develop trusted solutions and innovation in this space.  Advanced cybersecurity monitoring and protection by design will continue to be needed.

The Beckage Team of lawyers, who are also technologists, is well-versed in new and emerging technologies and works with clients to facilitate innovation through the use of IP protections.  We also assist companies in the implementation new technologies, like 5G, taking into consideration the cybersecurity, data privacy, and regulatory obstacles associated with their use.  From patent acquisition to policy drafting and review, Beckage attorneys are here to help your company capitalize on innovation.

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United States Department of Homeland Security (DHS) Announces New Grant Plan to Slow Epidemic Spread of Cyber Attacks

United States Department of Homeland Security (DHS) Announces New Grant Plan to Slow Epidemic Spread of Cyber Attacks

Businesses may be able to take a little sigh of relief that some help may be coming to the persistent threat of ransomware attacks.  The DHS announced that significant funds will be provided to a number of public and private sectors to help improve the nation’s protection against data security attacks and other crises.

The Feb. 25 Announcement

On February 25, 2021, DHS announced its funding notice for several different types of cyber preparedness grants worth nearly $1.87 billion.  After noticing a rise in both the number and complexity of cyber threats faced by communities, including targeted ransomware attacks on our infrastructure, hospital, transportation systems, DHS identified five critical priority areas for attention for its fiscal 2021 grant cycle: 1) cybersecurity; 2) soft targets and crowded places; 3) intelligence and information sharing; 4) domestic violent extremism; and 5) emerging threats.  These grant programs provide funding to state, local, tribal/territorial governments, transportation authorities, nonprofit organizations, and the private sector to improve the nation’s readiness in preventing, protecting against, responding to, recovering from terrorist attacks, major disasters, and other emergencies.

The DHS announced several non-competitive grants which are to be awarded to recipients based on several factors:

  • State Homeland Security Program – The State Homeland Security Program provides $415 million to support the implementation of risk-driven, capabilities-based state homeland security strategies to address capability targets;
  • Urban Area Security Initiative – The Urban Area Security Initiative provides $615 million to enhance regional preparedness and capabilities in 31 high-threat, high-density areas; and
  • Emergency Management Performance Grant (“EMPG”) – EMPG provides more than $355 million to assist state, local, tribal, and territorial governments in enhancing and sustaining all-hazards emergency management capabilities; and
  • Intercity Passenger RailAmtrak Program – The Amtrak Program provides $10 million to Amtrak to protect critical surface transportation infrastructure and the traveling public from acts of terrorism and increase the resilience of the Amtrak rail system.

Moreover, the DHS announced several competitive grants, including:

  • Operation Stonegarden – Operation Stongarden provides $90 million to enhance cooperation and coordination among state, local, tribal, territorial, and federal law enforcement agencies to jointly enhance security along the United States land and water borders;
  • Tribal Homeland Security Grant Program – The Tribal Homeland Security Grant Program provides $15 million to eligible tribal nations to implement preparedness initiatives to help strengthen the nation against risk associated with potential terrorist attacks and other hazards;
  • The Nonprofit Security Grant Program – The Nonprofit Security Grant Program provides $180 million to support target hardening and other physical security enhancements for nonprofit organizations that are at high risk of a terrorist attack;
  • Port Security Grant Program – The Port Security Grant Program provides $100 million to help protect critical port infrastructure from terrorism, enhance maritime domain awareness, improve port-wide maritime security risk management, and maintain or re-establish maritime security mitigation protocols that support port recovery and resiliency capabilities;
  • Transit Security Grant Program – The Transit Security Grant Program provides $88 million to owners and operators of public transit systems to protect critical surface transportation and the traveling public from acts of terrorism and to increase the resilience of transit infrastructure; and
  • Intercity Bus Security Program – The Intercity Bus Security Program provides $2 million to owners and operators of intercity bus systems to protect surface transportation infrastructure and the traveling public from acts of terrorism and to increase the resilience of transit infrastructure.

Impact on Business

Private sector businesses can apply for these grants, especially if they are in the process of developing and creating cyberwarfare and other data defense tools.  Grant  information can be found here.

Beckage has responded to countless data breaches and is always comforted to see more dollars that foster collaboration between public and private sectors to help defend and protect U.S. business and more.

If you have questions about the grant dollars or how to apply, please contact a Beckage attorney at 716.898.2102.

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Cyber InsuranceDFS February 2021 Guidance To Cyber Insurers

DFS February 2021 Guidance To Cyber Insurers

On February 4, 2021, the New York State Department of Financial Services (DFS) issued specific guidance to property/casualty insurers writing cyber insurance policies, known as the Cyber Insurance Risk Framework (“Framework”). The DFS promoted itself as the first US regulator in the nation to issue a specific guidance on cyber insurance, explaining the suggestions of the Framework are based on continued dialogue with the insurance industry and experts in cyber insurance regarding the shifting landscape of cybersecurity.

With the Covid-19 pandemic forcing companies to shift to an online workforce, cybercrimes, like ransomware and malware attacks, have drastically increased in frequency, severity, and cost to victimized companies. Cybercriminals use payments extorted from ransomware to fund more frequent and sophisticated ransomware attacks, emboldening them to target other organizations and widen their campaigns. The widespread use of ransomware has pressured cyber insurers to increase rates and tighten underwriting standards for cyber insurance.

The DFS advises New York regulated property/casualty insurers offering cyber insurance to establish a formal strategy for measuring cyber insurance risks that can be approved by a board or a governing entity. The Framework acknowledges that strategies should be proportionate with each insurer’s risk based on the insurer’s size, resources, geographic distribution, market share, and industries insured.  It is important to note the Framework constitutes a list of best practices and suggested approaches and does not yet constitute rules or regulations for the insurance industry.

The Cyber Insurance Risk Framework encourages cyber insurers to formalize a Cyber Insurance Risk Assessment Strategy that is managed by a governing body and establishes and/or formalizes qualitative and quantitative measures and goals for cyber risk that incorporate six best practices identified by DFS:

  1. Manage and Eliminate Exposure to “Silent” Cyber Insurance Risk

Cyber insurers should determine whether they are exposed to silent or non-affirmative cyber insurance risk, an insurer’s obligation to cover cyber incident losses under a policy that does not explicitly mention cyber incidents. The Framework suggests that insurers evaluate their silent risk exposure and take steps to minimize that exposure.

2. Evaluate Systemic Risk

Cyber insurers should conduct regular systemic risk evaluations and plan for potential losses. Increased reliance on third-party vendors has caused systemic risk to grow exponentially and thus, insurers should understand the third parties used by their insureds and model the effect of catastrophic cyber events that may result in simultaneous losses.

3. Rigorously Measure Insured Risk by Using Data

Cyber insurers should use a comprehensive, data-driven approach to assess their insured’s potential gaps and cybersecurity vulnerabilities.

4. Educate Insureds and Insurance Producers

Cyber insurers should educate their insureds and insurance producers about the value of cybersecurity measures and the need for, benefits of, and limitations of cyber insurance.

5. Obtain Cybersecurity Expertise

Cyber insurers can use strategic recruiting practices to hire employees with cybersecurity experience and invest in their training and development.

6. Require Notice to Law Enforcement

In the event of a cyberattack, cyber insurance policies should require victims notify and engage law enforcement agencies to help recover lost data and funds.

This guidance brings operational and other challenges to those in the property/casualty insurance market. It also adds new potential requirements to pass along to their insureds. For example, insureds may not know that their policy will require notification of law enforcement, and they may have reasons not to notify law enforcement, but if they choose not to it can lead to a coverage dispute.

Beckage advises those in the insurance industry on risk management, cybersecurity best practices and measures, third-party vendor management, and incident response.  Beckage also works with global clients to evaluate risk management, including opportunities to obtain various cyber and tech related coverage. We can be reached 24/7 via our data breach hotline at 844.502.9363 or IR@beckage.com.

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