For Attorneys & Legal
Defining Reasonable Security? HALOCK knows Duty of Care
When clients face cybersecurity challenges they need the right combination of experts to advise them, as cybersecurity risks are not exclusively a legal, business, or technical challenge. Risks can be created on corporate boards, in the C-Suite, within technical systems, or in the hands of end-users. Moreover, impacts can occur during a breach, or after a regulator reviews a case. And because cybersecurity risk and compliance is multi-disciplinary, advisors must capably address many specialized subjects at once to serve their clients well.
The SEC’s rules on Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure require public companies to describe their cybersecurity programs in their periodic reporting and how they manage RISK. Read HALOCK’s 10-K Survey analyzing initial results of filings with these requirements.
Frequently Asked Questions (FAQ) on Reasonable Security
Why is “Reasonable” Security Important?
“Reasonable security” language is found in most state and federal privacy laws, and regulators have ruled that you must show you took “reasonable” steps to protect sensitive information.
Reasonable security does not mean perfect security, but rather security that makes sense based on your risks and resources.
Organizations with reasonable security:
- Have a better chance of avoiding regulatory action after a breach
- Are better positioned during litigation and investigations
- Have more support from cyber insurance carriers and adjusters
- Instill more confidence with clients, partners, and stakeholders
What Laws and Regulations Reference “Reasonable Security”?
In the United States, a variety of state and federal laws and regulations require organizations to have “reasonable security practices and procedures.” These include, but are not limited to:
“(3) Grants the business rights to take reasonable and appropriate steps to help ensure that the third party, service provider, or contractor uses the personal information transferred in a manner consistent with the business’ obligations under this title.”
“(5) Grants the business the right, upon notice, including under paragraph (4), to take reasonable and appropriate steps to stop and remediate unauthorized use of personal information.”
“(e) A business that collects a consumer’s personal information shall implement reasonable security procedures and practices appropriate to the nature of the personal information to protect the personal information from unauthorized or illegal access, destruction, use, modification, or disclosure in accordance with Section 1798.81.5.”
“(b) A business that owns, licenses, or maintains personal information about a California resident shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to protect the personal information from unauthorized access, destruction, use, modification, or disclosure.
(c) A business that discloses personal information about a California resident pursuant to a contract with a nonaffiliated third party that is not subject to subdivision (b) shall require by contract that the third party implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to protect the personal information from unauthorized access, destruction, use, modification, or disclosure.”
“requiring that companies develop, implement, and maintain reasonable safeguards to protect the security, confidentiality, and integrity of the private information”
(a) A data collector that owns or licenses, or maintains or stores but does not own or license, records that contain personal information concerning an Illinois resident shall implement and maintain reasonable security measures to protect those records from unauthorized access, acquisition, destruction, use, modification, or disclosure.
(b) A contract for the disclosure of personal information concerning an Illinois resident that is maintained by a data collector must include a provision requiring the person to whom the information is disclosed to implement and maintain reasonable security measures to protect those records from unauthorized access, acquisition, destruction, use, modification, or disclosure.
“(4) Reasonable monitoring of systems, for unauthorized use of or access to personal information;”
Controllers must “Use reasonable safeguards to secure personal data.”
“the Gramm-Leach-Bliley Act, sets forth standards for developing, implementing, and maintaining reasonable administrative, technical, and physical safeguards to protect the security, confidentiality, and integrity of customer information.”
“What does a reasonable information security program look like?”
“every reasonable step must be taken to ensure that personal data that are inaccurate, having regard to the purposes for which they are processed, are erased or rectified without delay (‘accuracy’);”
How Do You Demonstrate Reasonable Security?
The most effective way is through a documented, risk-based assessment process that allows you to show how your organization identifies, prioritizes, and mitigates risks.
A legally defensible risk assessment provides a fact-based argument that your actions were prudent, informed, and proportionate.
Key elements include:
- Risk identification: What data, systems, and processes are impacted?
- Threat and vulnerability analysis: What risks are credible and foreseeable?
- Impact assessment: What could cause harm to customers, partners, or operations?
- Control evaluation: What safeguards are reasonable under current conditions?
- Documentation: Written records of your findings, decisions, and mitigations.
Security and legal frameworks such as NIST SP 800-30, ISO 27005, CIS Controls, and DoCRA (Duty of Care Risk Analysis) can help define and prove what “reasonable” looks like in practice.
Is Reasonable Security the Same as Compliance?
No. Compliance meets minimum standards, but reasonable security shows you went above and beyond with due care.
What Is the Duty of Care Risk Analysis (DoCRA)?
The Duty of Care Risk Analysis (DoCRA) standard is an approach to establish and document reasonable security for an organization. It states that reasonable security is:
“Security that balances the interests of the organization with the interests of others who may be harmed if security fails.”
DoCRA helps organizations to review and justify risk decisions, not only from a compliance point of view but also with respect to fairness, proportionality, and legal defensibility. In essence, it considers an organization’s mission, objectives, and obligations. It effectively bridges security, business, and legal aspects in one defensible framework.
How Does HALOCK Help Organizations Demonstrate Reasonable Security?
HALOCK offers cybersecurity assessments that are risk-based, legally defensible, and aligned with the Duty of Care Risk Analysis (DoCRA) standard.
HALOCK assessment helps you to:
- Identify, quantify, and prioritize cyber risks
- Select and balance controls with business impact
- Document a reasonable security posture for regulators, courts, and clients
- Establish an accountability and continuous improvement process
Learn how Duty of Care Risk Analysis (DoCRA) can help you achieve reasonable security:
What is Duty of Care Risk Analysis (DoCRA) for Cybersecurity?
What is Duty of Care Risk Analysis (DoCRA) for General Counsel?
What is Duty of Care Risk Analysis (DoCRA) for Regulators?
What is Duty of Care Risk Analysis (DoCRA) for Auditors?
What is Duty of Care Risk Analysis (DoCRA) for Executives?
What is Duty of Care Risk Analysis (DoCRA) for Risk Managers?
What is Reasonable Security for You or Your Client?
HALOCK Security Labs partners with attorneys and law firms to support clients for regulatory, strategic, and litigation matters using due care and reasonable person principles. HALOCK has pioneered an approach to risk analysis that aligns with regulatory standards for “reasonable” and “appropriate” safeguards and risk, and judicial “multifactor balancing tests” in data breach lawsuits. HALOCK has produced two emerging standards for cybersecurity risk management to promote our approach; the DoCRA Standard (Duty of Care Risk Analysis) maintained by the DoCRA Council, and CIS RAM (Risk Assessment Method) distributed by the prestigious Center for Internet Security.
By partnering with HALOCK, law firms expertly advise and represent their clients on legal, regulatory, and strategic matters while effortlessly demonstrating how clients’ complex technical decisions are defensibly reasonable. HALOCK is headquartered in Schaumburg, IL, in the Chicago area and advises clients on duty of care, regulatory compliance, and reasonable information security throughout the US.
