So now, businesses such as the hair salon or landscaping need to become experts in data security? These fines are too large for small businesses to handle. What’s even more concerning, is that some states levy hefty fines on small businesses for breaches although there is no fault on the part of the business.
There are state notification laws that inform consumers about data breaches as well as potential problems that may arise from those breaches. These notifications provide that if the consumer sues the company and wins, they get their attorney’s fees reimbursed from the business owner.
In addition to the fines by the state, business owners also have to deal with potential legal fees for both themselves and the folks that are suing them. That can become quite a significant amount of money and extremely detrimental to the owner’s bottom line.
Then some court cases have required businesses to provide customers with an identity-theft protection service [which monitors consumers’ credit records and alerts them of activity using their personal information, at $25 to $60 per customer].
Things Can Change
Researchers Ms. Selznick and Dr. Lamacchia from Bloomsburg University of Pennsylvania made their case recently in the Journal of Business & Technology Law. They argue, lawmakers should find a way to protect smaller companies from devastating penalties.
They suggest that small businesses obtain cybersecurity services from their information-technology vendors, so they get the advantage of the abilities of the vendor. A vendor could say, “If you use our application, we’ll give you cybersecurity protection.” It would be a market-driven solution.
Protect Your Business
In the meantime, how can businesses protect themselves from taking a significant financial hit from potential cyber lawsuits? Businesses and Entrepreneurs should consult with a financial advisor that specializes in supporting them like Veteran Wealth Partners.
This is one of many situations where the Wealth Protection Plan from Veteran Wealth Partners can help business owners and entrepreneurs mitigate exposure to potential lawsuits and protect their assets.
*Source: The Case for Protecting Small Firms From Cyber Lawsuits | Wall Street Journal
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