A Practical Legal Guide to Preventing and Responding to a Data Breach

A Practical Legal Guide to Preventing and Responding to a Data Breach

It’s becoming clear what will happen if someone steals someone else’s data. Merchants who have been sued for data breaches spend a lot of money fighting and settling the cases against them. They set aside $107 million to pay for the lawsuits and regulatory actions they will have to pay. This is how much Heartland Systems set aside for breach costs in 2009: $73.3 million.

Risks to Business

Security breaches can hurt a company’s business and put it at risk for money and the law. If a company loses trade secrets or confidential information in a security breach, it could hurt its business. Customer lists are essential to sales efforts, and the loss of these important assets puts a company’s ability to compete in the market.

Responding to a security breach costs a lot of money. Companies may hire computer forensic experts to look into the cause of the breach and keep the evidence safe. They may tap into network testing solutions for companies to determine how to increase security in various areas of their systems.

Laws for Protecting Information

There is a new field of law that deals with information security, or “infosec law,” but it isn’t very old in some ways.

Information security lawyers start by telling their clients what they need to do to keep their data and information safe. These rules may be based on public law (statutes and regulations) or private agreements made through agreements.

People, who work with infosec lawyers, help their clients answer the most important question: What does my company need to meet information security rules in law and contracts?

Moreover, information security law talks about who is responsible for security breaches or flaws in security products or services. Parties hurt by a security breach can sue to get money or an injunction against the people who broke the rules.

When the perpetrators can’t be found, or it’s not worth suing them, people who were hurt can sue others who allegedly let the breach happen or didn’t stop it. They can sue their vendors if the security products or services they bought don’t work as advertised or if they don’t stop someone from getting into their business.

People who work for infosec lawyers sue on behalf of people harmed. Infosec lawyers need to build relationships with IT and infosec professionals. Lawyers work together with outside and in-house technical experts to help their clients with their information security legal needs.

Keeping Security Laws in Mind


Data security laws have sprung up all over the country and in other countries over the years. These laws set rules for businesses and government agencies that they cover. When these laws were first made, they only applied to certain parts of the economy, like the financial and health care industries or the government. Later, state legislatures, foreign governments, and international bodies passed more general data protection laws. These laws covered a wide range of industries.

Some of these laws only set out general rules, like requiring certain types of information to be kept safe with “reasonable security,” Others have a much more detailed set of rules, and some of them even say how to use specific technologies, like encryption.

Most laws that deal with security require that security controls be put in place to protect security-sensitive information. On the other hand, other laws can help businesses if they use security technology.

Risks of Being Sued

When high-profile security breaches result in the loss of their personal information, individuals frequently sue. Sony is being sued by a class-action lawsuit filed nine days after its customers discovered their PlayStations had been hacked.

If your firm has clients’ personal information, a class-action lawsuit against it is a major risk. Plaintiffs have filed many lawsuits against businesses that had their data stolen. The plaintiffs in these cases typically file suit against the defendant businesses for negligence. Many people forget that a breach has occurred. On the other hand, the plaintiffs claim that the company had a duty to safeguard personal information and failed to do so, thus resulting in damage.

In addition, plaintiffs can file a breach of contract claim against the firm harmed by the violation. They could suggest written security guarantees, or they might claim that they have a legal duty to safeguard data. They then argue that the firm that had the security breach broke its contract with consumers by not protecting them.

Because there are no complex laws governing these matters, you may also seek compensation for damages and costs through various legal means. Under laws against unfair and deceptive trade practices or false advertising, individuals may make statutory claims against the firm.

Customers may claim that not having adequate security is unjust, misleads them because of security promises, or is unlawful due to data security laws. Because of the breaches, consumers may be able to get their money back from the firm. The FTC can also take action against a business for the same reasons. If a firm is accused of violating someone’s privacy or not supervising its staff, it may also be held liable for information security.

According to the bill, a consumer can sue a firm if it creates products or services that allegedly violate their privacy by accessing their apps or devices without permission.

Final Thoughts

Companies may be subjected to cybercrime penalties if they engage in fraudulent activity. The companies’ users and any third-party accounts utilized by them could also become targets of this type of infestation. So companies must familiarize themselves with data security laws to minimize the risks of getting sued.

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