Introduction
As cyber threats become more sophisticated and widespread, it is crucial to encourage organizations to implement effective cybersecurity measures. Organizations often depend on Managed Service Providers (MSP) to enhance their cybersecurity. This proposal suggests introducing State legislation that provides liability immunity or protection to companies that follow best practices in cybersecurity but still experience cyberattacks.
This proposal serves as a template for state and national cybersecurity defense. Though designed primarily for the United States, it is applicable to most countries. For more information, contact us at info@mspalliance.com.
Objective
To encourage proactive cybersecurity measures by providing legal protection to companies (including their managed IT service providers) that demonstrate a commitment to cyber hygiene, thereby fostering a safer digital environment for businesses and consumers alike.
Key Provisions
Definition of Cyber Hygiene:
Cyber hygiene refers to the practices and steps that organizations (and their MSPs) take to maintain the health and security of their information systems. This includes, but is not limited to, regular software updates, employee training, data encryption, multi-factor authentication, and incident response planning.
Eligibility for Immunity:
-Companies must demonstrate adherence to recognized cybersecurity frameworks such as NIST, ISO 27001, CIS Controls, etc. MSPs must demonstrate adherence to MSP frameworks such as the UCS. -Regular third-party audits and certifications must be conducted to verify compliance with these frameworks. -Companies must maintain comprehensive records of their cybersecurity practices and incident response efforts.
Scope of Immunity:
-Immunity from civil liability for data breaches or security incidents, provided the company can show adherence to defined cyber hygiene practices. -Immunity does not extend to cases of gross negligence or willful misconduct.
Reporting and Transparency:
-Companies must promptly report any cyber incidents to the State Cybersecurity Commission and cooperate with any subsequent investigations. -Annual cybersecurity reports must be submitted to the Commission, detailing the measures taken to maintain cyber hygiene and any incidents that occurred.
Role of the State Cybersecurity Commission:
-The Commission will oversee the implementation and enforcement of this legislation. -The Commission will provide guidance and resources to help companies achieve and maintain compliance with the defined cyber hygiene practices.
Benefits of Cyber immunity legislation
Enhanced National Security: Encouraging states to adopt cyber immunity laws can bolster national security. These laws motivate businesses to improve cybersecurity, decreasing the risk of cyberattacks nationwide. The federal government can also leverage state and local governments for policy implementation.
Enhanced Coordination and Standardization: Cyber immunity legislation can facilitate enhanced coordination and standardization of cybersecurity practices across various jurisdictions. This harmonization enables federal agencies to effectively collaborate with state and local governments, thereby ensuring a more cohesive and efficient response to cyber threats.
Standardization would be achieved by offering a range of cybersecurity frameworks as foundational models upon which organizations can build. Given the significant overlap among most cybersecurity frameworks, achieving standardization would be an inevitable outcome.
Economic Stability: Protecting businesses from the financial fallout of cyberattacks helps maintain economic stability. This stability is crucial for the federal government as it ensures a steady flow of tax revenue and reduces the need for federal financial assistance to states and businesses affected by cyber incidents.
Public Trust and Confidence: Demonstrating a commitment to cybersecurity through state-level legislation can enhance public trust and confidence in both state and federal governments. This trust is essential for maintaining the legitimacy and effectiveness of government institutions.
Reduction in Federal Resources: By empowering states to handle cybersecurity incidents more effectively, the federal government can reduce the resources it needs to allocate for incident response and recovery. This allows federal agencies to focus on more strategic and high-level cybersecurity initiatives.
Encouragement of Best Practices: Cyber immunity legislation encourages businesses to adopt and maintain high standards of cybersecurity. This widespread adoption of best practices can lead to a more secure national digital infrastructure, benefiting both the public and private sectors.
Benefits to the State
Enhanced Cybersecurity Posture: By incentivizing businesses to adopt robust cybersecurity measures, the state can improve its overall cybersecurity posture, reducing the likelihood of widespread cyber incidents.
Economic Stability: Protecting businesses from the financial fallout of cyberattacks can help maintain economic stability and prevent job losses.
Attracting Businesses: States with strong cybersecurity legislation can attract businesses looking for a secure environment to operate in, boosting local economies.
Public Trust: Demonstrating a commitment to cybersecurity can enhance public trust in state institutions and their ability to protect sensitive information.
Benefits to Businesses
Liability Protection: Businesses that adhere to best practices in cybersecurity can receive immunity from civil liability in the event of a cyberattack, reducing the financial and legal risks associated with such incidents.
Encouragement of Best Practices: The legislation incentivizes businesses to adopt and maintain high standards of cybersecurity, which can lead to fewer successful cyberattacks.
Cost Savings: By reducing the potential costs associated with data breaches and security incidents, businesses can save on legal fees, fines, and other related expenses.
Competitive Advantage: Companies that are certified as cyber hygienic can use this status as a marketing tool to build trust with customers and partners.
Benefits to MSPs
Increased Demand for Services: As businesses seek to comply with cybersecurity standards, the demand for MSPs that can provide these services will increase.
Enhanced Reputation: MSPs that help their clients achieve and maintain cyber hygiene can enhance their reputation and credibility in the market.
Risk Mitigation: By ensuring their clients adhere to cybersecurity best practices, MSPs can reduce the risk of incidents that could impact their own operations and reputation.
Insurance Benefits: MSPs that demonstrate a commitment to cybersecurity may receive better premiums and faster underwriting for cyber insurance.
Conclusion
By granting cyber liability immunity to companies that adhere to best practices in cybersecurity, States can encourage a proactive approach to cyber risk management. This legislation will not only protect businesses but also enhance the overall security posture of the state, making it a safer place for digital commerce and innovation.
