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The Nevada Code provides that damages from a cyber attack

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The Nevada Code provides that damages from a cyber attack will include “past” losses. Describe the past losses that could be incurred from a computer crime
Submitted: 2 years ago.
Category: Business Law
Expert:  Fran-mod replied 2 years ago.
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Expert:  kattorney replied 2 years ago.
A cyber attack on a company's network is not always immediately detectable. The hacker may enter the system and reenter the system many times without detection before finally being detected. This could be over a period of many months. Therefore, the date of detection cannot be assumed to be the same date as the date the system was originally compromised or the date the compromise was discovered. These differences are addressed by including past losses as part of the loss calculation. The attacker's actions that contributed to losses before detection are part any loss determination under the statute. For example, before the attack is detected the hacker may have produced checks duplicating the businesses checking account. These checks are usually cashed in relatively small amounts in out of state banks. These would be included in past damages.

A hacker could have placed meta tags on to the website, directing traffic to a different website. This could have been going on for months or even years before discovery. Damages are difficult to calculate for intangibles such as this, and include such things as lost sales, damages caused by customers going to other etailers, etc. Profits may be calculated by average sales and growth statistics.

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Customer: replied 2 years ago.

what is difference between a loss arising from the unavailability of a website and the lost profits that we incurred when that website is disabled?

 

A Corporation recently discovered that their network had been penetrated by a hacker several months ago. The hacker has not been active on their network for the last couple of months. No damages to the system are detectable. Should company recognize a loss?

Expert:  kattorney replied 2 years ago.
When an attack shuts down a website, the loss arising from the unavailability of a website to customers and clients must be calculated. The unavailability loss arises from the inconvenience caused to customers who want to use the website but are unable to do so. Also, losses may include employee time in restoring the system and lost worker productivity. Lost or destroyed program code is considered a tangible loss if the loss can be related to staff work hours used in creating the code. The value of a cyber asset includes the employees wages used in developing thewebsite. If the website is lost in an attack, the workers time needed to develop the asset is used in determining the extent of the loss. Additionally, workers time used in diagnosing, restoring, checking, and testing the network as well as possibly replacing lost data is part of the tangible loss from a cyber attack. Productivity losses arise from the reduction of efficient, normal production of work due to an event such as a cyber attack. If employees work through the website,lost worker productivity, another tangible cost, is determinable from the labor time during which company operations are diminished or shut down.
Although lost sales are not the same as unavailability, sales gures can help to evaluate the loss from the unavailability of the website. Growth of sales is an indication of consumer satisfaction with a business, its products, and its services. Unavailability of access to a companys website decreases consumer satisfaction; therefore, rates of sales growth provide an indication of the loss suffered from a disabled website. Lost profits occur when customers cannot gain access to a website and consequently go to another e-tailer or bricks and mortar store to make their purchases. Analyzing the intangible loss from profits foregone because of the crash of a website involves several considerations. First, it will be necessary to combine financial sales data and nonfinancial data collected about the website activity. The data needed to calculate lost profits is based on marketing information about the customer base, website statistics, and financial data. Website data about the number of customer visits and marketing information about the sales from these visits is needed as well as revenue and cost information to determine profit data. Without records of website activity and customers purchasing habits, there is little that an investigation into damage loss valuations can uncover. Lost sales are included as an identified loss under state statues, but they are an intangible loss that may not be recoverable under traditional business insurance since they are difficult to determine and are based upon past averages.
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Expert:  kattorney replied 2 years ago.
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