Like individuals, businesses have resolutions/goals for 2010, perhaps even this new decade. As information risk, such as HIPAA or the occurrence of a data breach, continues threaten companies and put individuals’ personal identities, finances and medical information in jeopardy, addressing this issue in the coming years is a worthy resolution for any business. With this January 28, 2010, being the second National Data Privacy Day, January is as good a time as any to begin thinking about your organization’s information risk. The following list, which is by no means exhaustive, provides ten critical areas businesses will need to consider when addressing this issue.

  1. Risk Assessment. Many businesses remain unaware of how much personal and confidential information they maintain, who has access to it, how it is used and disclosed, how it is safeguarded, and so on. Getting a handle on a business’ critical information assets must be the first step, and is perhaps the most important step to tackling information risk. You simply can’t adequately safeguard something you are not aware exists.
  2. Develop a Written Information Security Program. Even if adopting a written information security program (WISP) to protect personal information is not an express statutory or regulatory mandate in your state, having one is critical to addressing information risk. Not only will a WISP better position a company when defending claims related to a data breach, but it will help the company manage and safeguard critical information, and may even help the company avoid whistleblower claims from employees. For companies, a WISP can be a competitive advantage. Of course, in states like Massachusetts, Maryland, Oregon, Connecticut and others, a WISP in one form or another is required.
  3. Vendors/Business Partners. Businesses addressing their information risk cannot stop at their information systems, buildings, and employees. Very often, vendors of the business maintain significant amounts of sensitive company and personal information of that business. This list of vendors can be long and include service providers such as: employee benefits consultants/administrators/brokers, accountants, lawyers, record storage/destructions companies, office cleaning services, professional employer organizations, payroll companies, cloud computing or other information service providers, and so on. Businesses that turn over sensitive information to a vendor need to take steps to ensure the vendor has implemented appropriate safeguards to protect the information. If this information is personal information, a number of states mandate contract provisions requiring the vendor to safeguard the information.
  4. HIPAA. The recent changes by the HITECH Act, under the American Recovery and Reinvestment Act of 2009, will drive increased focus on HIPAA in 2010, particularly for business associates which for the first time become directly subject to many of the same privacy and security requirements as covered entities. The addition of a HIPAA breach notification requirement, effective September 23, 2009, and the growth of electronic health records, already are driving covered entities to amend their business associate agreements. Plan sponsors, health care providers and business associates all need to refocus their attention on HIPAA in 2010.
  5. Insurance. Like many other risks, information risk can be addressed in part through insurance. More carriers are developing products dealing with personal information risk, and specifically data breach response. This kind of coverage should be a part of any CIO, privacy officer or risk manager’s plan for safeguarding information.
  6. Identify “Red Flags”. Identifying “red flags” is the next step after implementing a WISP, beyond safeguarding sensitive information. The concept of “red flags” is to have policies and procedures designed to detect, prevent, and mitigate instances of identity theft – that is, with safeguards already in place, businesses need to be able to identify circumstances (“red flags”) which indicate incidents of identity theft could be occurring, and then take steps to prevent the identity theft or mitigate its effects. After a number of extensions, on June 1, 2010, the Federal Trade Commission will begin enforcing its “red flag” regulations that apply to financial institutions and creditors.
  7. Training. A necessary component of any WISP and a required element under most federal and state laws mandating data security, training deserves special mention if only to remind businesses to remind employees how powerful the small devices are that they carry around.
  8. Develop a Plan for Responding to a Breach Notification. All state and federal data breach notification requirements currently in effect require notice be provided as soon as possible. Delays in notification viewed as unreasonable could trigger an inquiry by the state’s Attorney General, or in the case of HIPAA protected health information, the Office of Civil Rights.
  9. Carefully Integrate New Technologies. As businesses look for new technologies to increase productivity, cut costs, and gain a competitive advantage, how those technologies address information risk must be a factor in the decision whether to adopt the technology. For example, cloud computing is fast becoming a popular tool used by businesses to enhance their computing capabilities, at substantially reduced costs in some cases, but it raises a number of issues concerning information risk.
  10. Watch for New Legislation. Today, managing data and ensuring its privacy, security and integrity is critical for businesses and individuals, and is increasingly becoming the subject of broad, complex regulation. It seems to be only a matter of time before U.S. companies are subject to a national law requiring the protection of personal information. Companies therefore need to stay tuned in order to continue to remain compliant and competitive in this regard.