Find out about your potential liabilities for a breach of confidentiality and how you can protect your sensitive information
When so many businesses rely on vast quantities of data, protecting confidential information is vital. Breaches can lead to significant consequences for both the individuals and organisations involved. A breach of confidentiality typically occurs when sensitive information is disclosed without authorisation.
Below we'll explore confidentiality, what constitutes a breach, the legal repercussions, and how to respond and prevent breaches of confidentiality. By understanding the severity of confidentiality breaches, you can create an awareness of the potential risks, consider your cyber-security controls, understand what sensitive information you hold, and the legal consequences.
What is confidentiality and why is it important?
Confidentiality is the legal obligation to protect sensitive information from unauthorised access and disclosure. It encompasses the practices used to ensure that private data remains secure, and it is only shared with authorised individuals.
Confidentiality is crucial is many contexts - for example, in healthcare it fosters trust between patients and medical professionals, ensuring that personal health information remains private. From a legal standpoint, it protects client privilege and sensitive case details. Generally, in business it safeguards intellectual property and trade secrets, which are vital for competitiveness and success.
Examples of confidential information may include patient records, which contain personal health data. Legal files at a law firm can hold client information and legal strategies. A business may store business plans or sensitive financial records. Protecting this information is essential not only for regulatory compliance, but also for maintaining trust and integrity.
What is a breach of confidentiality?
A breach of confidentiality occurs when sensitive information is disclosed or accesses without proper authorisation, violating trust established between parties. This breach can lead to significant consequences, including financial loss, reputational damage, and legal repercussions. Many businesses will insist on a confidentiality agreement being signed as part of their contracts.
There are several types of breaches of confidentiality. Intentional breaches happen when an individual deliberately discloses confidential information for personal gain, such as an employee leaking a trade secret to a competitor. Accidental breaches occur due to unforeseen circumstances or mistakes, like when an email containing sensitive information is sent to the wrong recipient. Lastly, negligent breaches arise from carelessness or failure to adhere to privacy policies, such as failing to properly secure files, resulting in sensitive documents being accessible to unauthorised individuals.
Regulatory and legal environment
Under the General Data Protection Regulation (GDPR) and the Data Protection Act 2018, organisations must adhere to strict data protection measures. Non-compliance can result in fines up to £17.5 million or 4% of global turnover.
Professionals are bound by a duty of care to protect sensitive information. Victims of data breaches may also pursue civil claims, leading to additional financial liabilities and damage to an organisation’s reputation. Professionals are bound by a duty of care to protect sensitive information. If you fail to protect sensitive information and your clients suffers a financial loss, they can seek financial compensation against you.
Professional indemnity insurance is an important protection for service providers because it can provide financial protection for a breach of confidentiality
Example of a breach of privacy and confidentiality
Notable cases, such as the British Airways data breach in 2018, exposed the sensitive details of hundreds of thousands of customers, resulting in a £20 million fine imposed by the Information Commissioners Office. Similarly, the 2019 WhatsApp vulnerability compromise affected over 400,000 UK users, prompting serious discussions around ethical accountability in data protection practices. These examples illustrate that breaches can lead to significant financial penalties and erode public trust, highlighting the critical need for robust confidentiality measures.
How to manage confidentiality risk?
Preventing breaches of confidentiality requires an approach that includes best practices, technological solutions, and a strong organisational culture. Best practices for safeguarding sensitive information include regular training for employees on data protection policies and their responsibilities regarding confidentiality.
Establishing clear policies for handling, sharing, and disposing of confidential material is crucial. Additionally, utilising encryption for data storage and transfer can protect sensitive information from unauthorised access.
Technology plays a vital role in maintaining confidentiality. Advanced security measures such as firewalls, intrusion detecting systems, and secure access controls help safeguard data from cyber threats. Implementing encryption protocols for emails and files ensures that even if data is intercepted it remains unreadable to unauthorised users. Regular software updates and vulnerability assessments are essential in protecting information systems against breaches.
Cyber security minimum controls
How can insurance provide protection?
In the UK, several types of insurance can help in the event of a breach of confidentiality.
Cyber insurance can cover the costs related to data breaches, including legal fees, notification expenses, and potential fines associated with GDPR non-compliance. Wheras, professional Indemnity Insurance safeguards businesses against claims arising from negligence or breaches of confidentiality, protecting professionals providing advice or services.
Directors and officers insurance can cover legal expenses and liabilities incurred by company executives due to wrongful acts, including failure to protect sensitive information. Together, these insurance products can provide essential financial protection and peace of mind in the event of confidentiality breaches.
Incident response and risk management
When a breach occurs, immediate actions are critical to mitigate damage. First, businesses should contain the breach by isolating affected systems to prevent further unauthorised access. Prompt investigation to understand the scope and cause of the breach is essential. Subsequently, affected parties should be notified, including employees, clients, and regulatory bodies, as required by law.
In the long-term, organisations must implement comprehensive measures to prevent a future confidentiality breach. This includes revising security protocols, enhancing employee training on data protection, and investing in advanced cyber security technologies, and appropriate insurance cover. Regular audits can identify vulnerabilities and inform necessary adjustments.
Transparent communication with affected parties is crucial in maintaining trust. Organisations should provide clear and timely updates regarding the nature of the breach, potential impacts, and steps being taken to rectify the situation. Open dialogue can help mitigate damage to the organisation’s reputation and reassure stakeholders that measures are in place to protect their information moving forward.
