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

According to state law, businesses in Missouri that experience a data breach must notify affected residents "without unreasonable delay." Notices can be written or delivered by telephone or electronically, and must be submitted as soon as possible after discovery of the breach.

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 consumer information is vulnerable to data breaches. IT consultants, healthcare providers, and financial institutions are among the industries with the highest risk of harm.

What is personally identifiable information?

Missouri's data breach notification law defines personal information as an individual's first name or first initial and last name linked to any one or more of the following data elements that relate to the person:

  • Social Security number
  • Driver's license number or other unique identification number created or collected by a government body
  • Financial account number, credit card number, or debit card number in combination with any required security code, access code, or password that would permit access to an individual's financial account
  • Unique electronic identifier or routing code, in combination with any required security code, access code, or password
  • Medical information
  • Health insurance information

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 a breach to all affected residents "without unreasonable delay."

What are Missouri's data breach notification requirements?

Missouri state law outlines notice requirements for when and how businesses need to respond to a security breach.

Breaches of security must be reported immediately after their discovery when they are believed to have compromised the personal information of Missouri residents, unless identity theft or other types of harm are unlikely.

Businesses must report a breach to all affected residents "without unreasonable delay and consistent with any measures necessary to determine sufficient contact information and to determine the scope of the breach and restore the reasonable integrity, security, and confidentiality of the data system." Delays are permitted when a law enforcement agency requests more time for a criminal investigation.

Businesses may provide communication to residents via telephone, written notice, or electronic notice. Substitute notice is allowed if a business demonstrates that the cost of providing notice would exceed $100,000, if the affected number of individuals to be notified exceeds 150,000, or if the business does not have sufficient contact information to satisfy the required notice.

If more than 1,000 individuals have been affected, businesses must also notify the state Attorney General's office and all nationwide consumer reporting agencies. If your business handles data for residents of the greater Kansas City area, data breach notification requirements may also be subject to laws for the state of Kansas, as well.

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

Notices to Missouri residents affected by a data breach should include:

  • The incident in general terms
  • The type of personal information involved
  • A telephone number that the affected consumer may call for further information and assistance, if one exists
  • Contact information for consumer reporting agencies
  • Advice that directs the affected consumer to remain vigilant by reviewing account statements and monitoring free credit reports

Notice requirements to the Missouri Attorney General and consumer reporting agencies should include:

  • The date of the breach
  • Number of affected residents
  • The scope of the breach
  • Any steps that the business has taken in mitigation of the breach

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, affected persons 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 MO?

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?

Per the state data breach notification law, the Missouri Attorney General has exclusive authority to bring an action to obtain actual damages for a willful and knowing violation of the law.

They may seek civil penalties up to $150,000 for each data breach discovered in a single investigation.

How can businesses prevent data breaches?

For businesses that store data, it's crucial to take appropriate steps to prevent data breaches. Businesses should implement and maintain a reasonable security policy and procedures to protect personal information.

A variety of methods can help safeguard PII, 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.

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 unauthorized access.

Compare 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 Missouri'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: August 1, 2022
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