Protecting personal data is (or should be) a hot topic for any business that collects, stores, or manages sensitive customer information. With the rise in cyberattacks, a recent Washington court case underscores the importance of safeguarding Personally Identifiable Information (PII) and Personal Health Information (PHI) of clients and customers. Here’s what every business owner should know and do to ensure compliance and protect their customers and their business.
You can learn more about the recent Washington court opinion on this topic at https://www.courts.wa.gov/opinions/?fa=opinions.disp&filename=395715MAJ.
1. Understand Your Duty of Care
If your business handles PII or PHI, you have a legal duty to take reasonable steps to protect that information from unauthorized access. This duty isn’t just a best practice—it’s an obligation recognized by Washington state law. Failing to meet this duty can expose your business to negligence claims if data is compromised during a breach.
PII and PHI can include:
- Full names
- Social Security numbers
- Dates of birth
- Medical records
- Health insurance policy information
- Financial account details
By collecting and storing such data, your business has the responsibility to anticipate potential risks, including targeted cyberattacks, and implement measures to mitigate them.
2. Implement Strong Cybersecurity Measures
Proactive cybersecurity is key. Regularly update your systems, employ encryption for sensitive data, and use multi-factor authentication for access controls. These measures not only reduce the risk of a breach but demonstrate that your business takes its duty of care seriously.
Tips for improving your data security:
- Hire or consult with IT professionals who specialize in data protection.
- Conduct regular security audits and vulnerability assessments.
- Train employees on recognizing phishing attempts and other common cyber threats.
- Ensure that data is encrypted both at rest and in transit.
3. Establish a Response Plan for Data Breaches
Even with strong preventive measures, breaches can occur. Be prepared with a comprehensive incident response plan that outlines how your business will act in the event of a data breach. Your plan should include:
- Immediate steps for containing the breach.
- Notifying affected individuals promptly as required by law (e.g., Washington’s data breach notification statutes).
- Cooperating with authorities and cybersecurity experts to assess and mitigate damage.
Having a clear response plan not only helps minimize potential harm to your customers but also demonstrates due diligence, which could protect your business from further liability.
4. Recognize the Potential Impact on Your Customers
A breach that exposes PII or PHI can lead to significant consequences for your customers, including identity theft, financial loss, and emotional distress. Your business may be held accountable not only for direct financial damages but also for non-economic impacts, such as customers’ anxiety and time spent resolving related issues.
Key considerations for your business:
- Ensure transparency with your customers. If a breach occurs, keep them informed and provide clear guidance on protective steps they can take.
- Offer support such as credit monitoring services to affected customers to help them monitor and respond to potential misuse of their data.
5. Understand the Value of Personal Information
PII and PHI are not just data points—they have intrinsic value. Cybercriminals target this information because of its utility in committing fraud and identity theft. Businesses need to acknowledge this value and treat customer data with the same diligence they would apply to safeguarding physical assets.
Data protection as an investment: Think of robust cybersecurity as an investment in your brand’s reputation and long-term trust with your customers. Data breaches can lead to lawsuits, regulatory fines, and irreparable damage to your business’s reputation.
6. Stay Informed on Data Privacy Laws
Washington state, like many other jurisdictions, has established laws and regulations aimed at protecting consumers’ personal data. These include:
- Notification requirements for breaches (RCW 19.255.010, RCW 42.56.590).
- Privacy and data protection acts that set standards for handling sensitive data.
- Guidelines and policies that emphasize the importance of preventing identity theft.
Failing to adhere to these laws can lead to significant financial and legal consequences. Make sure to consult with legal counsel to stay current on evolving regulations and to ensure your business practices comply with state and federal standards.
7. Develop a Culture of Data Protection
Your responsibility to protect customer information extends beyond IT departments. Make data protection a core value of your business by:
- Embedding data privacy practices into your business operations.
- Ensuring that all staff members understand their roles in protecting customer data.
- Building a workplace culture where cybersecurity and data privacy are prioritized and continuously improved.
Practical actions:
- Regular training programs on data handling and cybersecurity best practices.
- Policies that require secure password management and regular updates.
- Clear guidelines for data access, usage, and sharing within the organization.
Conclusion
Protecting PII and PHI isn’t just a technical requirement; it’s a critical aspect of running a responsible and customer-focused business. By understanding your duty, implementing robust security measures, and fostering a culture that prioritizes data protection, you can reduce the risk of breaches and build trust with your customers. Stay proactive, stay informed, and make data security a top priority to safeguard your business and those you serve.
