This month, we commemorate the fifth anniversary of the NY Shield Act.Introduced in 2019, the Shield Act, or the Stop Hacks and Improve Electronic Data Security Act, was designed to bolster data protection and ensure the data privacy of New York State residents.
Why Was the NY Shield Act Enacted?
The digital age has brought about incredible advancements but also significant risks, especially concerning data security. High-profile data breaches and increasing cyber-attack sophistication have left many individuals vulnerable to identity theft and other forms of fraud. Recognizing these threats, New York lawmakers saw the need to streamline, update, and strengthen the state’s data protection regulations to better protect its residents’ personal information.
What Does the NY Shield Act Mean for SMBs?
The Shield Act casts a wide net, impacting any business, regardless of size or location, that owns, collects, and safeguards computerized data containing private information of New York residents. Even if your business is not physically located in New York but handles data of New York residents, the law applies to you.
The act requires robust data security measures such as encryption, access controls, and regular security assessments to safeguard sensitive data from unauthorized access.
That sounds complicated and expensive, but luckily, the law is meant to be flexible and considers your company’s size and complexity in what is mandated of each individual business. All requirements are intended to be adjusted to fit your business’s specific needs and abilities.
Here’s a breakdown of what the law entails:
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Data Security Program
There are three main areas the act asks you to focus on:
- Administrative safeguards involve designating employees to oversee security, identifying potential risks, and evaluating the effectiveness of security measures.
- Technical safeguards focus on assessing risks in network and software design, information processing, transmission, and storage. This also includes measures for detecting, preventing, and responding to cyber attacks or system failures.
- Physical safeguards address the risks associated with information storage and disposal, protecting against unauthorized access to private information during collection, transportation, and destruction.
2. Breach Notification
The NY Shield Act expands the definition of a data breach.
Traditionally, data breach notification laws focused on instances where private information was acquired or sold without authorization. However, the NY Shield Act goes further by mandating notification even in cases where there is no concrete evidence that data has been stolen or misused; simply the possibility that someone could have accessed the data without permission triggers the notification requirement.
This proactive approach aims to enhance consumer protection by ensuring that individuals are promptly informed and can take steps to protect themselves from potential identity theft or fraud.
The notification must be made in the most expedient time possible and without unreasonable delay.
Consequences of Non-Compliance
Compliance with the NY Shield Act should be taken seriously.
Suppose a business neglects to establish the required security measures. This non-compliance can be reported to the New York Attorney General through consumer complaints, incident reports, third-party findings, media coverage, whistleblowers, and routine audits.
In this case, the office of the NY Attorney General, as the primary enforcer of the NY Shield Act, is authorized to take legal action and seek civil penalties of up to $250,000 or more, depending on the extent of the violation and the degree of negligence involved.
Additionally, companies may face private lawsuits from affected individuals seeking damages for any harm resulting from a data breach, which could result in significant financial strain and potential reputational damage to the company and its brand image.
How Your MSP Can Help You Navigate the NY Shield Act
Complying with the NY Shield Actcan be daunting for SMBs, but you don’t have to face it alone. Managed Service Providers (MSPs) like Meeting Tree Computer are here to guide you through the process. They can eliminate the stress of implementing the necessary safeguards, ensuring compliance without straining your internal resources.
Here’s how Meeting Tree Computer can make a significant difference:
1. Comprehensive Risk Assessments
Thoroughly evaluating your systems can pinpoint vulnerabilities, and strategies can be developed to mitigate risks and ensure your data remains secure. With their expertise, you can rest assured that your business is protected against potential threats.
2. Robust Security Measures
Setting up and managing security tools like firewalls, encryption, and intrusion detection systems is crucial. MSPs, like Meeting Tree Computer, will take care of these essential security measures, providing continuous protection for your business. Their proactive approach helps prevent breaches before they occur.
3. Employee Training on Data Security
Your employees are your first line of defense against cyber threats. Proper MSPs offer comprehensive training programs, educating your staff on best practices for data security. By learning to recognize and respond to potential threats, your team becomes vital to your security strategy.
4. Effective Breach Response Planning
A quick and effective response is crucial in the event of a data breach. Ask your MSPs to help you develop detailed incident response plans to ensure your team is prepared for possible scenarios. It is human not to want to anticipate the worst, but remember that 60%of small businesses go out of business after being victims of a data breach.
Since the establishment of the Shield Act in 2019, data breaches have surged dramatically. Over 7,000 reported incidents exposed more than 10 billion records globally. In New York alone, thousands of breaches affected millions of individuals.
While adherence to laws like the Shield Act might appear daunting, complicated, and expensive, it’s important to remember that not every requirement is costly or difficult to implement. With the proper support of a Managed Service Provider (MSP), like Meeting Tree Computer, small and medium-sized businesses (SMBs) in Orange County, NY, can meet these standards efficiently and effectively. This not only ensures compliance but also provides confidence and relief, knowing that your business is well protected against potential data breaches.
Take the necessary steps today and ensure your business is well-protected for the future.
