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The Basics: Why Data Security Matters | Upsize Minnesota | November/December 2023
In today’s digital age, the personal and sensitive consumer information organizations store is the single greatest target for bad actors. Breaches can financially cripple unprepared small businesses. Business leaders must understand the contour of data privacy laws and best practices to safeguard this information.
The importance of data privacy
“Data privacy” describes the protection of personal and sensitive information from unauthorized access, use or disclosure. This includes social security numbers, financial records, health information and other details that could identify or harm individuals.
Safeguarding such information is vital. A data breach may trigger legal consequences and reporting obligations which could divert internal resources and cause significant financial losses including fines, legal fees and compensatory restitution and nonmonetary damages, including reputational harm.
Laws and regulations governing data privacy
Numerous state, federal and international laws govern data privacy and security. These laws are rapidly evolving and broadly applied to large and small businesses. Because of this, it is important to stay abreast of new laws. Some notable ones include:
Do these laws apply to my business?
Data privacy laws and regulations apply to businesses that collect, maintain or use sensitive consumer information. All businesses should understand data privacy industry standards and what laws and regulations may govern their internal policies and procedures for safeguarding such information.
Best practices for a small business?
There is no single approach to implementing a data privacy and security management system. The appropriate safeguards depend upon the size of the organization, the kind of information gathered and used, and the laws applicable to your organization. With that in mind, here are a few key concepts:
Biggest threats to my business’ data security?
What should I do if my business is breached?
A well-prepared response is generally required and can mitigate financial losses to your customers and your business. When a breach is discovered, be prepared to take these steps:
Jessica Klander is a shareholder with Bassford Remele and the co-chair of the Consumer Defense practice group. Her practice focuses on defending lawyers, financial entities, healthcare providers, and other organizations against consumer financial protection claims, malpractice, and professional liability claims. In particular, she counsels organizations on privacy, data security, and governmental and regulatory affairs. She assists with advising and representing health care organizations, collection agencies, and law firms against state and federal regulatory inquiries, civil investigative demands, and consumer lawsuits.
Bryce Riddle is an attorney with Bassford Remele. He focuses his practice in the areas of complex commercial litigation, data privacy and cybersecurity, construction, general liability, and tort litigation. He has significant class action experience.
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