Businesses in Mississippi that experience a breach of security must notify all affected individuals, unless an investigation reveals that the breach was unlikely to cause harm.
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.
Mississippi state law [PDF] defines personal information as knowing an individual's first name or first initial and last name in combination with one or more of the following data elements:
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 to affected residents without unreasonable delay, unless an investigation reveals that the breach is unlikely to cause identity theft or other harm.
Mississippi state law outlines when and how businesses need to respond to a security breach. Breaches of security must be reported when they are believed to have compromised the personal information of residents and there is a risk of harm.
Businesses must report a breach to affected residents without unreasonable delay, unless an investigation reveals that the breach is unlikely to cause identity theft or other harm. Delays may be permitted only when notification would interfere with a law enforcement agency's criminal investigation.
Permitted methods include written notice, telephone notice, and electronic notice. A substitute notice is allowed when notification costs would exceed $5,000, over 5,000 people were affected, or if the business doesn't have sufficient contact information. The substitute notice should consist of emails, a conspicuous posting on the business's website, and notification of newspapers and other major statewide media.
Data breach notices sent to Mississippi residents typically include the business’s name and contact information, the type of information that was compromised, and a general description of the breach.
In the event of a breach involving online accounts, the business should direct residents to change their password or take other security measures to prevent an unauthorized person from gaining access.
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:
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.
The cost of a data breach can be significant, which is why cyber liability 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.
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.
Cyber liability 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:
All of these factors will be instrumental in determining how much cyber liability insurance your small business needs.
Failure to comply with Mississippi's data breach notification laws is considered an unfair trade practice. There is no private right of action, but the Attorney General may bring an action in the name of the state or enforce civil penalties.
For businesses that store data, it's crucial to take appropriate steps to prevent data breaches.
Businesses are advised to safeguard PII through a variety of security measures, such as designating one or more employees to coordinate a security program. It’s a good idea to conduct an audit of the personal information and unique identifiers you store in your data systems.
Strong passwords, security questions, two-step authentication, and access codes can provide reasonable data protection for your business, reducing the chance of an unauthorized acquisition of electronic files.
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 Mississippi'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.