What are the data breach notification laws in Nebraska?

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.

Nebraska's Financial Data Protection and Consumer Notification of Data Security Breach Act defines personal information as an individual'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 identification card number
• Financial account number in combination with a password or other means of access
• Credit card number or debit card number in combination with a security code or other means of access
• Unique electronic identification number or routing code in combination with a security code or other means of access
• Unique biometric data, such as a voice print, retina scan, or other unique physical representation
• User name or email address, in combination with a password or other means of access

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

Nebraska state law outlines the notification requirements of when and how businesses need to respond to a security breach.

Businesses in Nebraska must report data breaches to any affected residents "as soon as possible and without unreasonable delay." Nebraska businesses that experience a data breach must notify all residents whose personal information was compromised. Permitted methods include written notice, telephonic notice, and electronic notice.

A substitute notice is permitted when notification costs would exceed $75,000 or more than 100,000 residents need to be notified. Methods can include email, conspicuous posting on a website, or notification of major statewide media.

The business must also notify the Nebraska Attorney General any time that residents are notified of a breach.

While the state data breach law does not have specific requirements for the content of the notices sent to residents, notifications typically include the contact information for the business, which personal information was impacted, and contact information for the nationwide consumer reporting agencies (e.g., Equifax, TransUnion).

Businesses must send a data breach notification form to the Nebraska Attorney General that includes the following: 

• Name and address of the business
• The number of residents affected
• The date that the breach occurred and was discovered
• The type of personal information involved
• Any steps the business has taken to prevent further security breaches

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.

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.

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.

Businesses that violate Nebraska's data breach law and knowingly fail to provide notice of a security breach may face action in the form of subpoenas.

The Attorney General may enforce this law, and could seek out and recuperate financial damages for each affected Nebraska resident whose personal information was compromised.

For businesses that store data, it's crucial to take appropriate steps to prevent access by an unauthorized person.

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 an 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 privacy and protection for your business and any service providers who access this information, reducing the chance of a breach of security.

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 Nebraska'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.