data breach
Definition
A data breach happens when someone gains unauthorized access to private or sensitive information your business stores, such as customer names, credit card numbers, passwords, or Social Security numbers. This can happen through a hacker breaking into your computer systems, an employee accidentally sending information to the wrong person, or even a stolen laptop. Many states require you to notify affected customers and sometimes government agencies within a specific timeframe after discovering a breach.
Example
If a cybercriminal breaks into your online store's database and steals the credit card information of 500 customers, that theft is a data breach and you would likely be legally required to notify all 500 of those customers.
Watch Out
The costs of a data breach can be devastating because they include legal fines, customer notification expenses, and potential lawsuits, so investing in cybersecurity protection and a cyber liability insurance policy before a breach occurs is far cheaper than dealing with one after the fact.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.