Businesses in Utah that experience a breach of system security must notify all affected residents in the most expedient time possible without unreasonable delay. Failure to provide notice in a timely manner could result in steep civil penalties.
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.
Utah Code Chapter 44 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 breach of the security of the system.
Businesses must report a breach to affected residents "in the most expedient time possible without unreasonable delay."
Utah's Protection of Personal Information Act outlines the state's own notification procedures for when and how businesses need to respond to a security breach. Breaches of security must be reported when the integrity of personal information for state residents was or is reasonably believed to have been compromised and acquired by an unauthorized person.
Businesses must report a breach to affected residents "in the most expedient time possible without unreasonable delay" following the discovery of the breach. Delays are permitted only when a law enforcement agency states that the notification will impede a criminal investigation.
Permitted methods include written notice, telephone notice, and email notice. A substitute notice is allowed if the business doesn't have sufficient contact information. The substitute notice should consist of conspicuous posting of the notice in major statewide media, such as a newspaper of general circulation, consistent with the timing requirements outlined by state law.
State law does not specify the content of notices sent to Utah residents. Notices typically include the business’s name and contact information, the type of information that was compromised, and measures that residents can take to prevent identify theft or fraud, such as changing passwords to online accounts.
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 Utah's data breach notification law could result in significant fines for a business. However, there is no private right of action.
Violators of the law are subject to a civil fine of no more than $2,500 for a violation or series of violations concerning a specific consumer, up to $100,000 for all related violations concerning more than one consumer.
This limitation does not apply if the violations involve more than 10,000 Utah residents and more than 10,000 residents of any other U.S. states, or if the business settles a case for a greater amount.
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 and identity theft.
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 Utah'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.