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A Data Breach Liability Case You Need to Know About

When you’re busy, things can slip under your radar. That’s why we strive to keep you informed of the latest data security developments. A recent court ruling has increased your company’s data breach liability exposure. In this blog, we discuss the specifics of the ruling and what steps you can take to protect your data.

CareFirst Breach of Customer Records

Courtroom, Judge, male judge in black mirror background

In 2014, Maryland-based healthcare insurance provider, CareFirst, was the victim of a cyberattack. The resulting breach compromised 1.1 million customer records. Following the breach, CareFirst offered the affected victims two years of free credit monitoring and identity theft protection.

Attias v. CareFirst

In 2017, the CareFirst breach victims filed a case in a U.S. District Court, claiming CareFirst’s negligence substantially heightened their risk of identity theft. The U.S. District Court judge ruled in that the plaintiffs failed to prove how they had suffered harm from the breach and dismissed the claim. A U.S. Court of Appeals then overturned the District Court’s judgment, ruling that the CareFirst members’ risk of future injury was sufficient to allow the class action lawsuit to proceed.

This January, CareFirst asked the U.S. Supreme Court to review the case, arguing that if the decision made by the Court of Appeals was allowed to stand, companies could be sued for breaches of customer information “even if the plaintiff suffered no harm whatsoever.” The Supreme Court refused to hear CareFirst’s case, allowing the U.S. Court of Appeals’ ruling to stand.

Fallout and Solutions

The Attias v. CareFirst ruling means if your company fails to protect personal information, the affected individuals can sue your business without having to prove actual loss or damage. Subsequent litigation costs and legal fees can bankrupt your company. So what should you do in the wake of a data breach?

First, know where your customer data resides. Perform regular inventory audits of all company-owned and company-used software and hardware. Partner with a provider who can offer information management solutions for your documents and data. Invest in a breach reporting and privacy compliance service. For instance, our privacy toolkit helps you fulfill your legal requirement to report the loss of personally identifiable information (PII) to authorities and notify affected individuals. You have access to a team of privacy experts who assess and reduce your liability exposure.

We’ll continue to keep you updated on the latest data security developments. In the meantime, we hope you implement the solutions we’ve provided in this blog article.

Kent Record Management provides records and information management services for businesses throughout Michigan. To learn more, please contact us by phone or complete the form on this page.

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