A data breach is a serious and expensive problem for any small business.
Colorado State Law defines a breach as: When there is an unauthorized acquisition of unencrypted computerized data that compromises the security, confidentiality or integrity of personal information of a Colorado resident maintained by an individual or commercial entity.
Colorado State Law also dictates how a business must respond to a data breach or the business owner may face legal action by the Colorado State Attorney General to ensure compliance or to recover direct economic damages resulting from a violation. It is possible the business owner could also face a civil lawsuit from the injured party.
The two components of action that the business owner must address are:
1. They must ‘promptly’ conduct a good faith investigation to determine the likelihood that personal information has been or will be misused. If it is determined to be the case….
2. They must immediately (and without unreasonable delay) notify the individual or commercial entity via telephone, US Post, electronically.
Fortunately, a small business can purchase Data Breach coverage on their small business insurance policy which helps to cover the cost of the investigation and notification process. Depending on the level of coverage you purchase, expenses such as credit monitoring services for the afflicted, public relations restoration, legal fees and notification expenses can be reimbursed to the small business owner. Denver West Insurance Brokers, Golden CO works with many insurance carriers that offer data breach coverage for small business owners.