What are the data breach notification laws in Oregon?

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.

Oregon state law 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:

• Social Security number
• Driver's license number, state identification number, or passport number
• Financial account number, credit card number or debit card number, in combination with any security code that provides access to an individual's financial account
• Biometric data from automatic measurements of an individual's physical characteristics, such a fingerprint, retina, or iris, that are used to authenticate their identity
• Health insurance policy number or health insurance subscriber identification number in combination with any other unique identifier that a health insurer uses to identify the individual
• Any information about an individual's medical history or mental or physical condition or about a health care professional’s medical diagnosis

Personal information also includes a user name or other means of identifying an individual for the purpose of permitting access to their account, together with any other method necessary to authenticate the user name or means of identification.

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

The Oregon Consumer Identity Theft Protection Act 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.

Businesses must report a breach to affected residents "in the most expeditious manner possible, without unreasonable delay, but not later than 45 days after discovering or receiving notification of the breach of security." A delay is only permitted when it would interfere with a law enforcement agency’s criminal investigation.

Breaches that affect more than 250 individuals must also be reported to the Oregon Attorney General. If a breach affects more than 1,000 individuals, the business must notify nationwide consumer reporting agencies (e.g., Equifax, TransUnion).

Notification of the breach may be sent via written notice, telephone notice, or electronic notice. A substitute notice is allowed when notification costs would exceed $250,000, over 350,000 people were affected, or if the business doesn't have sufficient contact information. The substitute notice should consist of a conspicuous posting of the notice on the business's website and notification of major statewide media.

Data breach notices sent to Oregon residents must include the following:

• A description of the breach in general terms
• The date of the security breach
• The type of personal information involved
• Contact information for the individual providing the notice
• Contact information for the major consumer reporting agencies

The notice must also contain advice for affected individuals, such as guidance to check statements, monitor credit reports, and request a security freeze. This should also include guidance for how to report suspected identity theft to law enforcement, including the Attorney General and the Federal Trade Commission.

The form sent to the state Attorney General must include the business's name and address, the date of the breach, the number of affected persons, a brief description of the breach, and the timing, distribution, and content of the notice sent to residents.

When more than 1,000 residents are notified of a breach, the business must also provide nationwide credit reporting agencies with the the timing, distribution, and content of the notices sent to residents.

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. However, as Oregon state law requires notification within 45 days of the discovery of a breach, businesses will be obligated to follow that deadline instead.

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.

Failure to comply with Oregon's data breach notification laws is considered a violation of the state's Unlawful Trade Practices Act, which could result in severe civil penalties.

Individuals who violate or who aid another person in violation of this act can be penalized up to $25,000 for each violation.

For businesses that store data, it's crucial to take appropriate steps to prevent data breaches and protect customers from identity theft and other harm.

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 Oregon'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.