Legal Consequences of a Cyberattack
If you have any doubts about your system’s ability to withstand a cyberattack, then you likely need to upgrade. If you do not, you could find yourself facing serious fines and legal issues in addition to a serious blow to your reputation. Data breaches are on the rise, but preparedness is not keeping pace, particularly among small- and mid-sized businesses. This means they are at greater risk of legal consequences as they are legally required to protect customer data in their possession.
Cyber law is constantly evolving to ensure that proper protections are put into place. Failing to adequately protect the customer data in your company’s possession may lead to considerable fines. For this reason, all businesses, but small- and medium-sized ones, need to be aware of the legal consequences of a data breach, as well as the ways in which they might protect themselves from cyberattacks.
The Legal Implications of a Data Breach
If your business collects and stores personal data from your customers in digital format, you are required to take steps to keep that data secure. The exact measures required vary from one country to the next. On November 17, 2020, the federal government of Canada introduced a bill to enact new legislation granting greater protection to individuals in the event of privacy loss resulting from the failure or limitations of consumer privacy measures enacted by corporations.
If passed into law, the Consumer Privacy Protection Act (CPPA) would replace the current federal privacy law governing both federally regulated and private sector companies operating in those Canadian provinces and territories that lack their own legislation. In British Columbia, collecting using and disclosing personal information requires adherence to the Personal Information Protection Act, with federal guidelines applied to interprovincial and international transactions.
The nature and even the likelihood of penalties will depend on the particulars of the breach, such as the number of those affected, the level of the breach, and more. Your legal team will be of assistance in determining the extent of your liability. Your case will be judged based on the type of data involved in the breach and the level of the threat, but most of all, the measures you took to prevent the breach and the speed with which you reacted, informing the authorities and the individuals affected.
If you can demonstrate full legal compliance on your part and have an effective response plan, you will be able to avoid some of the fines. If you fail to notify the authorities and involved parties without delay, or if your security measures are found wanting, you may be facing litigation.
Cybersecurity is a growing concern for all. You should be sure that you have a data safety professional on board to ensure your safety from cyberattacks and have an appropriate response plan to deal with any possible breach.
Responding to a Cyberattack
If you suffer a data breach due to a cyberattack, you are bound by law to inform the affected partied as quickly as possible “if it is reasonable to believe that the breach creates a real risk of significant harm to the individual.” In addition, “the organization must also inform other organizations or government institutions of the breach if the notifying organization believes that those other organizations or government institutions may be able to reduce the risk of the harm that could result from the breach or mitigate that harm.”
Significant harm is defined as bodily harm, humiliation, damage to reputations or relationships, financial loss, identity theft, negative impact on the credit record, damage to property, or loss of property. It also refers to loss of employment and business or professional opportunities.
Ensure that your IT security department is equipped and prepared to thoroughly investigate every aspect of a data breach, including the level of the breach and its origin. Your data protection officer must provide the concerned regulator with all relevant information without undue delay.
Your security incident response plan should include:
- External legal counsel with relevant experience in data and privacy protection cases
- A public relations channel to mitigate damage done to public perception
- Insurance brokers and other personnel to submit loss claim notices and notify insurance carriers
- A dedicated team to contact affected individuals, either by email or phone call
A procedure to reset your system and recover data without impacting routine
Every business should assume they have either been attacked, are being attacked, or will be attacked. Fast detection and swift response are the small business owner’s only defense.
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We hope this information is helpful we want to make this as easy as possible for you, eliminate the learning curve, and inform you all about the dangers your company may face when exposed to cybersecurity.
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