A Small Business Guide to Data Privacy

As privacy laws evolve, it’s important to understand your responsibilities when storing confidential data as a business. You must make sure the private data you collect about your customers cannot easily fall into the wrong hands. Following this small business guide on data privacy will help you meet federal regulations and avoid litigation.

Understanding Data Privacy

Every large or small business that collects private information on customers, partners, or others needs to use industry-standard safeguards for data protection. Online entities, especially e-commerce sites, must use robust cybersecurity technology if they collect confidential data. Healthcare organizations and law firms are held to a particularly high standard for maintaining modern technology and data privacy safeguards.

Additionally, businesses must take appropriate steps to enter privacy agreements with customers. A website must first get permission from each customer to collect, use, or sell their personal information. Your company must further give proper notice whenever the privacy policy is updated. Customers should be allowed to access and delete their data when they choose.

From a legal standpoint, data privacy does not mean the same as data security. Data privacy relates more to the management of contracts and policies for protecting data from being accessed by unauthorized visitors. Data security refers to the actual methods involved in protecting data from hackers, such as 24/7 network monitoring, firewalls, and encryption.

Federal Privacy Laws

At the moment, there is no blanket federal law on data privacy for all businesses to follow, but the Biden Administration is expected to address this issue. Only three states so far have comprehensive data privacy laws: California, Nevada, and Maine. The General Data Protection Regulation (GDPR) protects data privacy on an international level, and over 80 nations have data privacy laws in place.

Meanwhile, the Federal Trade Commission (FTC) has investigated and penalized many firms that were not compliant with existing regulations on published policy promises. Businesses are required to live up to their privacy policy and maintain reasonable efforts to protect confidential information. Additionally, your business must follow industry-specific regulations, along with privacy laws that apply to your region.

Making Data Privacy a Priority

There are multiple good reasons why a business should prioritize data privacy beyond avoiding lawsuits if a cybersecurity breach occurs. Businesses that take this proactive step gain an edge over competitors that don’t.

Managers need a thorough understanding of the data their companies collect and how this data is used. Business leaders need to be knowledgeable of all privacy laws pertaining to their locations. They should also be aware of the appropriate technology or work with an IT expert.

An effective strategy for a small business to develop its privacy agreement with customers is to start with minimal personal data collection. As the business grows, the company can develop strong security layers in the process. Keeping confidential information lean will help reduce risks involved with data storage. Your company should further develop a plan to regularly destroy nonessential data.

Businesses can no longer take data privacy for granted. Every business must be aware that all organizations are potential targets for hackers who are looking to steal data and possibly sell it to other criminals. The strongest data protection methods from a technological perspective include virtualization, firewalls, and encryption. Another point about data protection is that all critical data should be backed up in at least two locations to minimize the chances of the data getting lost, overwritten,

Use this guide to data privacy for protecting your business from potential data privacy complaints and legal issues. Would you like to learn more about protecting your assets? Contact the experts at Colorado Nonprofit Insurance Agency, part of HUB International in Denver, Colorado at 303-894-0298. We will help you find the best coverage for your organization.