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Preparing Cybersecurity for Bond Ratings Preparing Cybersecurity for Bond Ratings

Preparing Cybersecurity for Bond Ratings

The Bond Buyer's January 15, 2020 article "How cybersecurity is factoring into credit ratings" (accessible here to The Bond Buyer subscribers) highlights how cyberattacks are an emerging factor in public finance credit ratings for state and local governments, governmental authorities and non-profit borrowers. According to the article, "Credit rating agencies are looking at the quality of the computer systems personnel and whether a government entity has a plan to deal with cybersecurity." Ice Miller provides end-to-end counsel regarding data security and privacy issues, helping our public finance clients adequately prepare for a cyber-event. While such preparation makes prudent business sense, as stated in the article, it may also be viewed as a positive credit factor by rating agencies, which of course translates to lower borrowing costs.
As a threshold matter, we help clients mitigate these risks. We develop information security and privacy programs for clients, modify programs to reflect changes in the business or legal landscape and remain available to respond as quickly as possible to incidents that might arise. By helping clients identify risk and plan for incident response, we can help minimize the impact of a cyber-security event.
However, given the scope and number of attacks, risk mitigation is rarely enough. Indeed, even the most prudent entities are falling victim to cyberattacks. So, risk also needs to be transferred through cyber-insurance. A still-evolving product addressing ever-evolving risks, it can be very difficult to evaluate cyber-insurance without outside expertise. Leveraging our insurance and privacy attorneys, Ice Miller regularly assists with an insurance gap analysis to identify risks, coverages and coverage gaps. Using the results from this review, we are able to identify and recommend new strategies for efficient risk transfer. This can range from additional insurance procurement to modifications to existing contracts to internal controls geared toward uninsured risk. This gap analysis can be completed as necessary, upon insurance renewals, when the client's risk profile materially changes, as a newly elected official takes office or in connection with changes in executive leadership.
For more information on how Ice Miller can help you prepare for a cyberattack, please contact Nick ReuhsDavid Nie, Jane Herndon, Heather James, Tyler Kalachnik, Lisa Lee, Erik Long or James Snyder.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
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