Data Breach Insurance in Washington, D.C.
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What are the data breach notification laws in Washington, D.C.?

Businesses in Washington, D.C. that experience a data breach must notify affected residents and the Office of the Attorney General in the most expedient time possible.

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

What is personally identifiable information?

Washington, D.C.'s data breach notification law defines personal information as an individual's first name or first initial and last name, phone number, or address, and any one of the following:

  • Social Security number
  • Driver’s license number or District of Columbia Identification Card number
  • Credit card number or debit card number
  • Account number, password, or other means of access to a financial or credit account
  • Passport number or military identification number
  • Taxpayer identification number
  • Medical information
  • Biometric data
  • Genetic information and DNA profiles
  • 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 breach "in the most expedient time possible and without unreasonable delay."

What are Washington, D.C.'s data breach notification requirements?

District 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 D.C. residents, unless identity theft or other types of harm are unlikely.

Businesses must report a breach "in the most expedient time possible and without unreasonable delay." All affected residents must be notified, along with the Attorney General.

If the breach involved Social Security numbers or tax identification numbers, then businesses must provide the affected residents with 18 months of free identity theft prevention services.

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

Security breach notifications sent to District residents must include the following:

  • A description of the types of information that were subject to the breach
  • The business's contact information
  • The toll-free telephone numbers and addresses for the major consumer reporting agencies (Equifax, TransUnion, etc.)
  • A statement explaining the right to obtain a free security freeze and how to request it
  • Contact information for the Federal Trade Commission (FTC) and the Office of the Attorney General

To notify the D.C. Attorney General, businesses must email the following information to [email protected]:

  • The name and contact information of the person reporting the breach
  • The name and contact information of the business that experienced the breach
  • A description of the data breach, including its type, cause, and date(s) it occurred
  • The types of personal information involved
  • The number of affected residents
  • Any steps taken so far by the business
  • Address and location of corporate headquarters, if outside of the District
  • Any knowledge of foreign country involvement
  • A sample of the notice for affected residents

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, 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.

Protect your business with cyber liability insurance

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.

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 liability insurance cost?

Businessperson calculating the cost of cyber liability insurance.

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:

  • 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?

Failure to provide notice of a security breach is a violation of the District's Consumer Protection Procedures Act (CPPA). Businesses may have to pay treble damages (three times the actual damages determined by a jury) or $1,500 per violation (whichever is greater), along with punitive damages and attorney's fees.

How can businesses prevent data breaches?

For businesses that store data, it's crucial to take appropriate steps to prevent data breaches. In fact, D.C. law requires businesses to implement and maintain reasonable security safeguards to protect personal information.

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 a security audit of the various types of personal information, unique identifiers, and other data elements you might have in your data systems.

Requiring 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 an unauthorized acquisition.

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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 Washington, D.C.'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: July 12, 2022
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