Data Breach Insurance in Delaware
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What are the data breach notification laws in Delaware?

According to state law, businesses in Delaware that experience a data breach must notify affected residents within 60 days of its discovery, unless a shorter timeframe is required by federal law.

What is a data breach?

A data breach is the unauthorized access or release of someone's personally identifiable information (PII), which is any data that could reveal an individual's identity.

Data breaches can happen if an employee clicks on a link in a phishing email, if a laptop or thumb drive is stolen, or if hackers break into a computer network. Accidental security breaches are another cause, such as misconfigured software that leaves data unprotected.

Every small business that handles credit cards or stores customer information is vulnerable to data breaches. IT consultants, healthcare providers, and financial institutions are among the industries with the highest risk.

What is personally identifiable information?

Delaware's security breach notification law defines personal information as knowing a resident's first name or first initial and last name in combination with one or more of the following:

  • Social Security number
  • Driver's license number or state or federal identification card number
  • Account number, credit card number, or debit card number in combination with a password or other means of access to a financial account
  • Passport number
  • Username or email address, in combination with a password or other means of access to an online account
  • Medical history, including health insurance policy number, subscriber identification number, or any other unique identifier used by a health insurer
  • Unique biometric data, such as fingerprints or retinal scans
  • Individual taxpayer identification number

Any business that handles PII should invest in cyber liability insurance to mitigate costs in the event of a data breach.

Businesses must report a breach "without unreasonable delay but not later than 60 days after determination of the breach of security."

When is notification of a breach required?

Delaware law outlines when and how businesses need to respond to a security breach.

Businesses that experience a data breach must promptly investigate the likelihood that personal information will be misused. Residents must be notified as soon as possible if misuse occurred, or is reasonably likely to occur.

Businesses must report a breach "without unreasonable delay but not later than 60 days after determination of the breach of security." Notification obligations can be delayed only when they would interfere with a criminal investigation by law enforcement, or when it takes longer for a business to discover that personal information was compromised.

Notifications may need to be provided in a shorter time frame if they are required sooner by federal law.

What are Delaware's data breach notification requirements?

Delaware businesses that experience a data breach must notify any affected Delaware residents whose personal information was compromised. Permitted methods include written notices, notification by telephone, and electronic notice, such as email.

For data breaches that affect 500 or more residents, the business must also notify the Office of the Attorney General.

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What do business owners need to include in a data breach notice?

Delaware law does not require a specific form of notice to alert residents that their personal information has been subject to a security breach. However, the Consumer Protection Unit of the Delaware Department of Justice offers a model form [PDF] to provide businesses with guidance of what to include in a data breach notification.

Through this form, they recommend that businesses include the following information in their notice to affected residents:

  • A summarized description of the security breach
  • The date or estimated date of the security breach
  • A description of the personal information that was acquired
  • Actions being taken by the business
  • Recommended steps that affected residents can take to protect themselves (notifying credit reporting agencies about fraud alerts and credit freezes, etc.)
  • The business's contact information, for any questions from residents

To notify the Delaware Attorney General, businesses must use the online Data Breach Notification Form. The form includes the name and address of the business, the number of people affected, the date of the breach, how residents were informed, and other relevant details.

If the breached data includes the Social Security numbers of residents, the business must provide them with credit monitoring services for at least one year, unless an investigation reveals that the breach was unlikely to cause identity theft or other harm.

Breaches of health information are regulated on the federal level

Data breaches that impact healthcare facilities and healthcare professionals are regulated by federal laws. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) includes a Breach Notification Rule that requires notification after a breach of unsecured protected health information. Businesses must notify:

  • Affected individuals
  • The Secretary of Health and Human Services
  • The media, if over 500 residents of a state or jurisdiction were affected

Under HIPAA, individuals must be notified by first-class mail, or by email if they've agreed to electronic communication, within 60 days of the discovery of a breach.

Protect your business with cyber insurance

The cost of a data breach can be significant, which is why cyber insurance is so important for businesses that handle personal data.

Notifying those affected and paying for credit monitoring can be expensive. You’ll have to investigate and fix your security weaknesses while suffering a possible loss of income, and government fines can also be costly. You might even face a ransomware attack, where hackers shut down your computer systems and demand payment.

Small businesses most often need first-party cyber liability insurance. Also called data breach insurance, this policy provides financial protection against data breaches at your business.

You can often add this coverage to your general liability insurance or business owner’s policy (BOP), which combines general liability coverage with commercial property insurance at a discount.

Businesses that recommend software need additional protection

If you're responsible for another company's data security, then you may need third-party cyber liability insurance. This policy covers legal expenses when a client blames your business for failing to prevent a data breach at their company.

Because most tech businesses need this coverage, it's usually included with their errors and omissions insurance (E&O) in a bundle called tech E&O.

E&O insurance, also called professional liability insurance, covers your legal costs in the event that a client sues you for making a mistake or failing to deliver on a contract. Tech E&O extends that coverage to include lawsuits related to data breaches and cyberattacks.

While any business could be at risk of a lawsuit after a data breach, this coverage is especially important for information technology businesses, especially IT consultants, network security companies, and cybersecurity businesses that recommend software or are responsible for information security.

How much does cyber insurance cost in DE?

A small business owner calculating their cyber liability costs

Cyber insurance can be an affordable option for small businesses looking for data breach protection. Several factors affect the cost of a cyber liability policy, including:

  • Amount of sensitive data handled
  • Your industry
  • Coverage limits
  • Number of employees

All of these factors will be instrumental in determining how much cyber liability insurance your small business needs.

What are the penalties for not giving notice of a data breach?

The state Attorney General may impose "appropriate damages and penalties" for failure to follow security breach notice requirements.

Private actions are permitted by individuals, with a cap of triple the damages plus costs and legal fees.

How can businesses prevent data breaches?

For businesses that store data, it's crucial to take appropriate steps to prevent data breaches. In fact, Delaware's state data breach law requires businesses to implement and maintain reasonable security procedures and practices to protect personal information.

Businesses are advised to safeguard PII through a variety of methods, such as designating one or more employees to coordinate a security program. It’s a good idea to conduct a security audit of the various types of personal information, unique identifiers, and other data elements you might have in your data systems.

Requiring strong passwords, security questions, two-step authentication, and access codes can provide reasonable data protection for your business and any service providers who access this information, reducing the chance of an unauthorized acquisition.

Get quotes from trusted carriers with Insureon

Complete Insureon’s easy online application today to compare insurance quotes from top-rated insurance carriers for cyber policies. Our licensed agents will help you find coverage that fulfills Delaware's insurance requirements and protects your business. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.

Updated: March 5, 2024
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