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Policy Guidepost

Policy GuidePost

Policy Guidepost


Part One:



There is one underlying principal across all industries that tie the corporate and small business landscape together, this string albeit thin is very strong as it is the one common denominator. It is your company data. Whether it be medical, real estate, law firm, or anything for that matter – that data is the blood that sustains you and the cybercriminal / disgruntled employee / or corporate thief wants that data. As you are a small business the degree of impact intensifies.


According to the Verizon 2018 Data Breach Investigation Report 58 percent of malware attack victims are categorized as small businesses. Once a large company gets hit by a malware attack or breach it takes around 191 days or so for that breach to be revealed. As a small business its harder because the impact is felt immediately and there is no hiding it.


As a small business you actually have more vulnerabilities than most. We have come across many entities that have the false impression that they have little to offer that a cybercriminal would want, or they are just simply unaware. It is a horrible stigma of the cybersecurity world that even the largest of companies with all the resources available to them, still have an inherent misunderstanding of the mindset of the cybercriminal. They keep repeating the same things and the same breaches happen repeatedly.


The Verizon Data Breach Investigation Report also notes that 92.4 percent of malware is delivered by email. Your email is the primary vector of attack for both malware and people exfiltrating data.  Email attachments from an attacker are commonly referred to as phishing attacks. They are customized to look and be as genuine as possible so that the target is compelled to click on it.  According to Symantec’s 2018 Internet Security Threat Report, 88 percent of malicious emails use malware to trap their victims. The number is most likely higher.


To put that in perspective, each user at a small business, say less than 250 employees would receive at a minimum nine malicious emails per month. Therefore, let’s take this at the ground level, this means if you have ten employees, your company will get about 90 attempts to infiltrate your network via email phishing attempt. As a small business without the necessary resources the possibility of you not even discovering such an extraction of data or an attack is even higher than most.  


Here is where diligence comes into play. While yes, your data is your blood, if that blood contains Social Security numbers, finance information, or any type of privileged information, especially financial – then the blood carries a horrible contagion because legally you are mandated to keep your blood clean and defended from intrusions.


It is important to know how certain parts of the law apply to your business and what your exposure would be. You don't have to be an attorney to read and understand a statute, in fact we believe its important that you as a business understand how these things affect you because an attorney is not going to protect your data, you will only lose more money when you pay the attorney for the civil suit. Lets proceed first with the long legal talk but still very necessary information. We at Cybercrypto believe in spreading the knowledge, not in bits and pieces but the full statute.





Statute 501.171 Security of confidential personal information.



(1) DEFINITIONS. —As used in this section, the term:


(a) “Breach of security” or “breach” means unauthorized access of data in electronic form containing personal information. Good faith access of personal information by an employee or agent of the covered entity does not constitute a breach of security, provided that the information is not used for a purpose unrelated to the business or subject to further unauthorized use.


(b) “Covered entity” means a sole proprietorship, partnership, corporation, trust, estate, cooperative, association, or other commercial entity that acquires, maintains, stores, or uses personal information. For purposes of the notice requirements in subsections (3)-(6), the term includes a governmental entity.


(c) “Customer records” means any material, regardless of the physical form, on which personal information is recorded or preserved by any means, including, but not limited to, written or spoken words, graphically depicted, printed, or electromagnetically transmitted that are provided by an individual in this state to a covered entity for the purpose of purchasing or leasing a product or obtaining a service.


(d) “Data in electronic form” means any data stored electronically or digitally on any computer system or other database and includes recordable tapes and other mass storage devices.


(e) “Department” means the Department of Legal Affairs.


(f) “Governmental entity” means any department, division, bureau, commission, regional planning agency, board, district, authority, agency, or other instrumentality of this state that acquires, maintains, stores, or uses data in electronic form containing personal information.


(g) 1.“Personal information” means either of the following:


a. An individual’s first name or first initial and last name in combination with any one or more of the following data elements for that individual:


(I) A social security number;


(II) A driver license or identification card number, passport number, military identification number, or other similar number issued on a government document used to verify identity;


(III) A financial account number or credit or debit card number, in combination with any required security code, access code, or password that is necessary to permit access to an individual’s financial account;


(IV) Any information regarding an individual’s medical history, mental or physical condition, or medical treatment or diagnosis by a health care professional; or


(V) An individual’s health insurance policy number or subscriber identification number and any unique identifier used by a health insurer to identify the individual.


b. A user name or e-mail address, in combination with a password or security question and answer that would permit access to an online account.


2. The term does not include information about an individual that has been made publicly available by a federal, state, or local governmental entity. The term also does not include information that is encrypted, secured, or modified by any other method or technology that removes elements that personally identify an individual or that otherwise renders the information unusable.


(h) “Third-party agent” means an entity that has been contracted to maintain, store, or process personal information on behalf of a covered entity or governmental entity.


(2) REQUIREMENTS FOR DATA SECURITY.—Each covered entity, governmental entity, or third-party agent shall take reasonable measures to protect and secure data in electronic form containing personal information.




(a) A covered entity shall provide notice to the department of any breach of security affecting 500 or more individuals in this state. Such notice must be provided to the department as expeditiously as practicable, but no later than 30 days after the determination of the breach or reason to believe a breach occurred. A covered entity may receive 15 additional days to provide notice as required in subsection (4) if good cause for delay is provided in writing to the department within 30 days after determination of the breach or reason to believe a breach occurred.


(b) The written notice to the department must include:


1. A synopsis of the events surrounding the breach at the time notice is provided.


2. The number of individuals in this state who were or potentially have been affected by the breach.


3. Any services related to the breach being offered or scheduled to be offered, without charge, by the covered entity to individuals, and instructions as to how to use such services.


4. A copy of the notice required under subsection (4) or an explanation of the other actions taken pursuant to subsection (4).


5. The name, address, telephone number, and e-mail address of the employee or agent of the covered entity from whom additional information may be obtained about the breach.


(c) The covered entity must provide the following information to the department upon its request:


1. A police report, incident report, or computer forensics report.


2. A copy of the policies in place regarding breaches.


3. Steps that have been taken to rectify the breach.


(d) A covered entity may provide the department with supplemental information regarding a breach at any time.


(e) For a covered entity that is the judicial branch, the Executive Office of the Governor, the Department of Financial Services, or the Department of Agriculture and Consumer Services, in lieu of providing the written notice to the department, the covered entity may post the information described in subparagraphs (b)1.-4. on an agency-managed website.




(a) A covered entity shall give notice to each individual in this state whose personal information was, or the covered entity reasonably believes to have been, accessed as a result of the breach. Notice to individuals shall be made as expeditiously as practicable and without unreasonable delay, taking into account the time necessary to allow the covered entity to determine the scope of the breach of security, to identify individuals affected by the breach, and to restore the reasonable integrity of the data system that was breached, but no later than 30 days after the determination of a breach or reason to believe a breach occurred unless subject to a delay authorized under paragraph (b) or waiver under paragraph (c).


(b) If a federal, state, or local law enforcement agency determines that notice to individuals required under this subsection would interfere with a criminal investigation, the notice shall be delayed upon the written request of the law enforcement agency for a specified period that the law enforcement agency determines is reasonably necessary. A law enforcement agency may, by a subsequent written request, revoke such delay as of a specified date or extend the period set forth in the original request made under this paragraph to a specified date if further delay is necessary.


(c) Notwithstanding paragraph (a), notice to the affected individuals is not required if, after an appropriate investigation and consultation with relevant federal, state, or local law enforcement agencies, the covered entity reasonably determines that the breach has not and will not likely result in identity theft or any other financial harm to the individuals whose personal information has been accessed. Such a determination must be documented in writing and maintained for at least 5 years. The covered entity shall provide the written determination to the department within 30 days after the determination.


(d) The notice to an affected individual shall be by one of the following methods:


1. Written notice sent to the mailing address of the individual in the records of the covered entity; or


2. E-mail notice sent to the e-mail address of the individual in the records of the covered entity.


(e) The notice to an individual with respect to a breach of security shall include, at a minimum:


1. The date, estimated date, or estimated date range of the breach of security.


2. A description of the personal information that was accessed or reasonably believed to have been accessed as a part of the breach of security.


3. Information that the individual can use to contact the covered entity to inquire about the breach of security and the personal information that the covered entity maintained about the individual.


(f) A covered entity required to provide notice to an individual may provide substitute notice in lieu of direct notice if such direct notice is not feasible because the cost of providing notice would exceed $250,000, because the affected individuals exceed 500,000 persons, or because the covered entity does not have an e-mail address or mailing address for the affected individuals. Such substitute notice shall include the following:


1. A conspicuous notice on the Internet website of the covered entity if the covered entity maintains a website; and


2. Notice in print and to broadcast media, including major media in urban and rural areas where the affected individuals reside.


(g) Notice provided pursuant to rules, regulations, procedures, or guidelines established by the covered entity’s primary or functional federal regulator is deemed to be in compliance with the notice requirement in this subsection if the covered entity notifies affected individuals in accordance with the rules, regulations, procedures, or guidelines established by the primary or functional federal regulator in the event of a breach of security. Under this paragraph, a covered entity that timely provides a copy of such notice to the department is deemed to be in compliance with the notice requirement in subsection (3).


(5) NOTICE TO CREDIT REPORTING AGENCIES.—If a covered entity discovers circumstances requiring notice pursuant to this section of more than 1,000 individuals at a single time, the covered entity shall also notify, without unreasonable delay, all consumer reporting agencies that compile and maintain files on consumers on a nationwide basis, as defined in the Fair Credit Reporting Act, 15 U.S.C. s. 1681a(p), of the timing, distribution, and content of the notices.



(a) In the event of a breach of security of a system maintained by a third-party agent, such third-party agent shall notify the covered entity of the breach of security as expeditiously as practicable, but no later than 10 days following the determination of the breach of security or reason to believe the breach occurred. Upon receiving notice from a third-party agent, a covered entity shall provide notices required under subsections (3) and (4). A third-party agent shall provide a covered entity with all information that the covered entity needs to comply with its notice requirements.


(b) An agent may provide notice as required under subsections (3) and (4) on behalf of the covered entity; however, an agent’s failure to provide proper notice shall be deemed a violation of this section against the covered entity.


(7) ANNUAL REPORT.—By February 1 of each year, the department shall submit a report to the President of the Senate and the Speaker of the House of Representatives describing the nature of any reported breaches of security by governmental entities or third-party agents of governmental entities in the preceding calendar year along with recommendations for security improvements. The report shall identify any governmental entity that has violated any of the applicable requirements in subsections (2)-(6) in the preceding calendar year.


(8) REQUIREMENTS FOR DISPOSAL OF CUSTOMER RECORDS.—Each covered entity or third-party agent shall take all reasonable measures to dispose, or arrange for the disposal, of customer records containing personal information within its custody or control when the records are no longer to be retained. Such disposal shall involve shredding, erasing, or otherwise modifying the personal information in the records to make it unreadable or undecipherable through any means.




(a) A violation of this section shall be treated as an unfair or deceptive trade practice in any action brought by the department under s. 501.207 against a covered entity or third-party agent.


(b) In addition to the remedies provided for in paragraph (a), a covered entity that violates subsection (3) or subsection (4) shall be liable for a civil penalty not to exceed $500,000, as follows:


1. In the amount of $1,000 for each day up to the first 30 days following any violation of subsection (3) or subsection (4) and, thereafter, $50,000 for each subsequent 30-day period or portion thereof for up to 180 days.


2. If the violation continues for more than 180 days, in an amount not to exceed $500,000.

The civil penalties for failure to notify provided in this paragraph apply per breach and not per individual affected by the breach.


(c) All penalties collected pursuant to this subsection shall be deposited into the General Revenue Fund.


(10) NO PRIVATE CAUSE OF ACTION.—This section does not establish a private cause of action.




(a) All information received by the department pursuant to a notification required by this section, or received by the department pursuant to an investigation by the department or a law enforcement agency, is confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution, until such time as the investigation is completed or ceases to be active. This exemption shall be construed in conformity with s. 119.071(2)(c).


(b) During an active investigation, information made confidential and exempt pursuant to paragraph (a) may be disclosed by the department:


1. In the furtherance of its official duties and responsibilities;


2. For print, publication, or broadcast if the department determines that such release would assist in notifying the public or locating or identifying a person that the department believes to be a victim of a data breach or improper disposal of customer records, except that information made confidential and exempt by paragraph (c) may not be released pursuant to this subparagraph; or


3. To another governmental entity in the furtherance of its official duties and responsibilities.


(c) Upon completion of an investigation or once an investigation ceases to be active, the following information received by the department shall remain confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution:


1. All information to which another public records exemption applies.


2. Personal information.


3. A computer forensic report.


4. Information that would otherwise reveal weaknesses in a covered entity’s data security.


5. Information that would disclose a covered entity’s proprietary information.


(d) For purposes of this subsection, the term “proprietary information” means information that:


1. Is owned or controlled by the covered entity.


2. Is intended to be private and is treated by the covered entity as private because disclosure would harm the covered entity or its business operations.


3. Has not been disclosed except as required by law or a private agreement that provides that the information will not be released to the public.


4. Is not publicly available or otherwise readily ascertainable through proper means from another source in the same configuration as received by the department.


5. Includes:


a. Trade secrets as defined in s. 688.002.


b. Competitive interests, the disclosure of which would impair the competitive business of the covered entity who is the subject of the information.


(e) This subsection is subject to the Open Government Sunset Review Act in accordance with s. 119.15 and shall stand repealed on October 2, 2019, unless reviewed and saved from repeal through reenactment by the Legislature.


Statutes such as the above are common place and can be found pretty much in just about every state. What this means is that you as a small business are responsible for the security of the data you keep as it is considered privileged and failure to do that not only puts your customers in jeopardy but also your company because it can cost you a lot of money.


The most important thing that must stay emblazoned in the mind of the business owner is this - Your data is valuable, you do not have huge resources to deal with a breach like the large companies, the consequence can easily be the collapse of your business as well as huge expenditures. You must be proactive and think outside of the box.


Let us go industry by industry and dissect why data diligence should no longer be considered an afterthought.


Click on the links below for general information on data diligence per your professional category


Medical and Associated Entities


Lawyers and Technology


Realtors and their Associations