Does the Risk of a Data Breach Increase Your Vulnerability? 

These days, data breaches are more common than ever. According to a recent report published by cybersecurity firm SentinelOne, global data breaches are at an all-time high, with an average of over 2,000 breaches per week. 

A mix of vulnerabilities via the use of ransomware, AI-driven attacks, phishing schemes, and general human error mean that companies housing sensitive client and consumer data face an increased risk of a potential data breach. 

The risk of a data breach should put organizations on high alert — they’re typically difficult to detect, even harder to contain, and incredibly costly. 

According to the same report, data breaches, on average, take upwards of 181 days to detect, and will typically take another 60 days to contain. To add insult to injury, in the U.S. alone, these breaches routinely cost companies over $4 million in security upgrades, penalties, loss of business, and sometimes civil suits.

What Does a Client Data Breach Mean for You?

If your organization suffers a client data breach, then you unfortunately face a wide array of potential legal vulnerabilities. 

Broadly, these legal vulnerabilities include fines associated with regulatory enforcement and contractual liabilities, as well as the possibility of civil or class action lawsuits filed against you by clients who claimed to have been harmed by the data breach. 

Here’s what those potential vulnerabilities look like in greater detail:

• Regulatory fines/Penalties — State Attorneys Generals and the Federal Trade Commission (among potential other Federal agencies) will typically investigate data breaches in order to determine liability, cybersecurity negligence, and other issues associated with non-compliance
• Contractual Liabilities — Contractual agreements will often include details associated with cybersecurity and data breaches, and the confirmation of these breaches will often create due cause for contract termination and even require payouts to those affected by the breach
• Cost of Compliance and Notification — Data breaches, by law, require the organization affected by the data breach to manage the incident via contacting the individuals affected by the breach, notifying them of the nature of how their data has been affected, and offering them free credit monitoring services at your expense
• Loss of Privileged Data — If the breach included legally privileged or highly confidential data, then the organization potentially faces claims of malpractice
• Civil Lawsuits — The affected organization also faces potential third-party civil suits that may claim breach of contract, negligence, and violations of certain consumer protection laws
• Insurance Coverage Issues — Given the nature of these situations, insurance companies may dispute their obligation to provide coverage, leaving you with potentially hefty bills and fines to cover on your own

For those organizations that have experienced a data breach, the Federal Trade Commission recommends these vital actions:

• Secure the operations
• Fix vulnerabilities
• Notify all appropriate parties

Visit the FTC site for detailed information on how to respond to a cybersecurity breach.

You’ve Had a Data Breach: Follow These Legal Steps 

First things first: Don’t panic. Yes, data breaches are cumbersome and require a great deal of effort to detect, contain, and communicate about. However, your legal liability in these cases aren’t crystal clear. 

This is why it’s essential to secure legal representation to ensure that you, your organization, and your assets are protected as you sort things through. 

At the Law Offices of Robert J. DeGroot, we specialize in helping organizations like yours understand their options in these situations, and strive to ensure that your constitutional rights are protected as we navigate the legal process together. 

We’ll ensure that you’ve acted in compliance with every essential legal requirement that state and federal law require, and work with you to achieve the best possible legal outcome. 

For over fifty years, we’ve handled complex criminal cases at the state and federal levels, providing an aggressive defense strategy to all those who secure our services.

If you or someone you know has been accused of a client data breach, reach out to the legal team at the Law Offices of Robert J. DeGroot today!