business data breach

Data breaches and cyberattacks have emerged as a critical threat to Florida businesses in the digital age. Understanding the causes behind these breaches and their possible consequences is essential for companies in assessing and mitigating risks in cybersecurity practices. However, breaches can happen even with thorough cybersecurity policies and procedures. Under Florida law, companies must prevent or address harm if faced with signs of a security breach, even if the leak is not their fault. Here is a short guide to common data breach causes in Florida, what businesses are required to do in case of one, and the consequences if they fail to follow them.

Common Causes of Business Data Breaches

Cyberattacks are more frequent than ever. As more and more companies experience these security breaches, the amount of compromised personal data available to bad actors is on the rise. The causes of cybersecurity breaches often fall into one of the following categories.

  • Organizational cybersecurity flaws. Businesses often fall prey to breaches because of vulnerabilities in their cybersecurity infrastructure due to outdated software, unpatched systems, and inadequate security protocols. In 2022, 81% of confirmed breaches were due to weak, reused, or stolen passwords.
  • Insider threats. Employees can cause breaches from within due to a lack of awareness about cybersecurity best practices or being disgruntled. In 2022, 83% of data breaches involved internal actors.
  • Third-party risks. Business collaboration and partnerships often entail sharing data with third-party vendors. However, inadequate security measures by the third party can become a gateway for breaches affecting Florida businesses.
  • Sophisticated cyberattacks. Florida businesses are prime targets for sophisticated cyberattacks such as ransomware or phishing schemes. These attacks exploit vulnerabilities and human error to gain unauthorized access to sensitive information.

Data breaches are also becoming costly. In 2023, the average cost a business expected to pay after a data breach was $5.13 million. This can be devastating after a small business data breach.

Data Breaches and Florida’s Information Protection Act

The Florida Information Protection Act (FIPA) governs what companies must do after the occurrence of a data breach. It is designed to protect Floridians’s personal information by imposing certain requirements on businesses that handle sensitive data. Regardless if the incident is a small business data breach or a big company’s data breach, companies must follow these requirements.

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Notification Requirements

Under FIPA, businesses or individuals who experience a data breach must notify affected individuals in Florida within 30 days of discovery of the breach. This may be waived if a law enforcement agency determines that notification would impede a criminal investigation.

Definition of Personal Information

FIPA defines personal information as an individual’s first name or initial and last name in combination with other sensitive data. This data includes Social Security numbers, driver’s license numbers, and financial account information.  

Notification Content 

The law specifies the necessary content for breach notifications. This includes details about the breach incident, the type of personal information compromised, and contact information for credit reporting agencies.

Record Retention

FIPA also mandates that businesses maintain reasonable measures to protect personal information and retain records of security measures for at least five years.

2023’s Florida Digital Bill of Rights

On June 6, 2023, the governor signed the Florida Digital Bill of Rights into law, making Florida the tenth state to enact a consumer data privacy law. However, the scope of this law is narrow, applying only to companies that collect consumer personal data and exceed $1 billion in annual revenue. Only a handful of companies must comply with the new law’s requirements. Talk to an Orlando business lawyer if you have questions about the law’s applicability.

Consequences of a Data Breach for Florida Businesses

Data breaches can have many negative consequences for Florida businesses, including:. 

  • Legal consequences. FIPA appoints the Florida Attorney General to bring enforcement actions against violators. Penalties for non-compliance can include fines of up to $500,000 per breach. 
  • Reputational damage. Data breaches erode customer trust and lost credibility. This can often lead to customer churn and reluctance from potential clients to engage in future business.
  • Financial costs. Data breaches are rarely an easy fix. Costs associated with investigating the breach, implementing security enhancements, and potential fines can significantly impact a company’s bottom line.
  • Operational disruption. Business operations often come to a grinding halt post-breach. Restoring systems, addressing vulnerabilities, and regaining stability can take substantial time and resources, causing slow productivity. 

Dealing with the aftermath of a data breach can have a negative impact on any business.

Protecting Your Business’s Operations

Protecting sensitive data is the key for businesses to avoid breaches. This includes implementing robust cybersecurity measures within the company such as installing firewalls and antivirus software, encrypting sensitive data, limiting who has access to storage and access controls, and requiring multi-factor authentication for anyone accessing its systems. Businesses should perform audits of their cybersecurity practices and update them as necessary to keep defenses as current as possible. In addition, companies should conduct regular training sessions to educate employees about cybersecurity best practices, phishing awareness, and the importance of strong passwords. Employees are often the first line of defense against breaches.By implementing proactive measures and fostering a culture of cybersecurity within the organization, businesses can significantly reduce the risk of data breaches and better protect sensitive information. For more information about cybersecurity breaches and possible legal implications, contact the team at BrewerLong to set up a consultation.

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