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Digital Data & Cyber Security: What Businesses Need To Know

Author: Scarinci Hollenbeck, LLC

Date: April 16, 2014

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Cybersecurity, digital data, data protection…What are these buzz words and how do they affect business?

With cybersecurity being at the forefront of clients’ and customers’ minds, businesses should take reasonable precautions to protect digital data that they create, collect, process, and/or maintain. And, according to The New York Times, companies are now requiring their law firms to increase their security and demonstrate that their confidential information is protected. In fact, it has been reported that some financial institutions are requesting their law firms to complete lengthy questionnaires detailing their security measures to protect sensitive digital data.

Photo by Ennio Dybeli on Unsplash
Photo by Ennio Dybeli on Unsplash

Reportedly, the Target data breach was accomplished by hackers using electronic credentials stolen from a vendor. Moreover, with the Internet of Things (IoT) making it easier to create, collect, process, and/or maintain data in a variety of ways, potential vulnerability points of entry are increasing in scope and frequency.  Focusing on vendor’s security measures is essential for reducing legal liability in this area. Requiring a vendor to show proof of cybersecurity can also assist with holding the vendor accountable. It will also help ensure the vendor continues to provide reliable and consistent online security efforts and stay apprised of the latest threats to data security.

Below are a few considerations regarding digital data that businesses should address:

  • Dissemination. Discuss how the vendor distributes sensitive information. For example, in many cases the vendor should be prohibited from saving sensitive digital data on portable thumb drives or emailing files to unsecure devices.
  • Networking. Discover if the vendor’s computers are linked to shared networks, especially in foreign countries where hacking may be prevalent.
  • Access. Your vendor should account for the people who will have access to the confidential information. Access should be minimized as much as possible.
  • Security. Vendors should be required to provide proof of cybersecurity and the measures that will be taken to protect business relations.

Finally, businesses may consider inquiring about obtaining additional insurance to cover digital data breaches.

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