Could Outdated Computers Lead to Legal Liability for Your New Jersey Business?

Staying on top of computer and software updates can be a time-consuming effort, particularly for small businesses that do not have a dedicated IT team. For individual users, waiting to install Microsoft Windows software updates until after you finish a project or meet a deadline can be extremely tempting, which makes it very likely you will continually wait to perform the update.

But could failing to update your software expose you to legal liability for your New Jersey business?

Unfortunately, it is possible. One of the most important reasons to update your hardware and software is because the latest versions are generally more secure. Therefore, if the hardware or software you are using is widely known to be out-of-date or have serious security flaws, you could be held accountable for the fallout from a subsequent data breach.

As we have previously reported on our Business Law News Blog, data breaches are becoming increasingly more frequent and costly. Recent studies suggest that cyberattacks against U.S. businesses have increased nearly 50 percent in the past few years. Moreover, according to Ponemon Institute’s 2013 Cost of Data Breach Study, the average organization cost of a data breach now tops $5 million.

Companies like Target Co., Adobe Systems, Inc., and Sony Corp. have all recently faced class-action lawsuits by consumers whose information was stolen in connection with cyberattacks. These suits are not only costly, but also can severely damage a company’s reputation.

Given the risks, we want to warn our readers about the upcoming “retirement” of popular Microsoft products. On April 8, 2014, both the Windows XP operating system and Microsoft Office 2003 will reach their “end of life” dates. Generally, this will mean no further technical support from Microsoft and no more security updates.

While both systems will still work, hacking attempts and malware attacks are expected to skyrocket because of these vulnerabilities and expectation that many users will ignore or otherwise fail to address the issue. Therefore, if your business is still using Windows XP or Office 2003, the time is now to start planning for a transition.

If you have any questions about data breach liability or would like to discuss ways to improve your business’s protection and response strategy, please contact me, Fernando M. Pinguelo, or the Scarinci Hollenbeck attorney with whom you work. Visit eWhiteHouseWatch (www.eWHWblog.com) to learn more about cyber security and data protection.