Privacy risk refers to risks associated with the potential unauthorized disclosure of confidential information. Almost every business maintains data relating to its clients and customers. There are federal and state laws that protect and individual’s right to keep this information private. This information can include social security numbers and birthdates, but also, drivers license numbers, credit card numbers and medical information just to name a few.
The unauthorized disclosure of this information can lead to requirements to notify all affected parties, provide credit monitoring services and also heavy fines and penalties by regulatory agencies. These costs can be incurred even if no one was actually damaged. Additionally, the disclosing party can be held liability for damages incurred by an injured party.
Some of the costs incurred can include the followng:
1. Cost of Forensics (identifying the problem) . Even on a small claim this can be a six figure cost
2. Cost of notification. This can run from $3.00 to $10 per person just to notify
2. Cost of Credit Monitoring This can run anywhere from $10-$20 per person
3. Cost of fines and penalties A single HIPPA violation can cost $25,000 just in fines
4. Cost of Marketing, coordinating the notification and repairing the company image
5. Cost to fix the problem This could involve completely reprogramming your systems.
Companies can be protected from this risk through a properly structured privacy policy.
Contact Mike Smith at msmith@axisins.com for more details
