Paying to fix a mistake or defending yourself when your work’s quality is called into question could put your company out of business. An unintentional breach of confidence insurance protects you from lawsuits arising from bad advice or a breach of a duty of care.
Professional indemnity liability insurance offers unintentional breach of confidence insurance. Any business, large or small, that provides services or professional advice to clients, such as architects, accountants, solicitors, consultants, or those in the maintenance and transportation fields, needs insurance.
It’s critical to tailor unintentional breach of confidence insurance to the needs of your specific business, which is why we’ve written this article for you.
Unintentional breach of confidence Inusrance-Explanetion
Processing sensitive data, such as a client’s financial information or intellectual property, entails a high level of responsibility that you may be unaware of. Accidents happen, even with the best of intentions, and can lead to an unintentional breach of confidence.
But what is a breach of confidentiality, exactly? What does this mean for your business? How will you defend yourself in the event that any legal claims arise as a result of it?
A breach of confidentiality occurs when you fail to keep confidential data or private information provided to you in confidence by a client. It entails giving information to a third party without your clients’ or data owners’ permission.
Unfortunately, the vast majority of data breaches are unintentional. Many of them have happened as a result of all-too-common employee mistakes. Only a few of them are done deliberately. This emphasizes the importance of comprehending what a breach of confidentiality is, how it occurs, and how to tighten up your processes to reduce the risk to your business.
How unintentional breach of confidence can occur
When information is accessed without permission, it is called a data breach. The breach can be unintentional, such as when an employee accidentally exposes confidential information.
Data breaches come in a variety of shapes and sizes, but here are a few of the most common:
- Ransomware: A nefarious party encrypts data, rendering it inaccessible until a company pays a ransom to regain access.
- Phishing:An employee unwittingly grants someone access to confidential data because the imposter appears to be a trusted organization, such as a bank.
- Malware: When a company downloads infected files, it gives hackers access to its data.
Professional indemnity insurance for unintentional breach of confidence
If you are in charge of or deal with a client’s confidential information, you should consider purchasing professional indemnity insurance to protect yourself and your company in the event of a data breach. If a client sues you for a mistake you made, professional indemnity insurance will protect your business. It can cover legal costs associated with defending a claim as well as any compensation awarded as a result of the claim.
Professional indemnity insurance will cover the costs of legal advice as well as any potential compensation due to your clients as a result of a breach of confidentiality in your business.
Why get Unintentional Breach of Confidence Insurance
A breach of confidentiality can have serious ramifications for a company. Including, but not limited to:
- Clients who believe their information has been breached has caused them or their business harm may take legal action.
- Loss of faith
- Impact on your brand’s reputation and ability to attract new customers
- Fines levied by the Information Commissioner’s Office (ICO) under the General Data Protection Regulation (GDPR)
- Unintentional intellectual property theft or erroneous authority attribution
- Inaccurate information or bad advice
- Errors and omissions, as well as negligence (or breaches of duty of care).
- Confidentiality violations
- Documents or data are lost.
- Infringements on trademarks or copyrights that go unnoticed
Unintentional Breach of Confidentiality Insurance is crucial because it can protect you from having to bear the full cost of these claims. This will allow you to keep your business up and running as usual, with minimal disruptions. These reasons necessitate that you get an insurance cover to protect you in such case scenarios.
Who needs unintentional breach of confidence Insurance?
Your business may require an unintentional breach of confidence Insurance if:
- It gives clients advice.
- It is in charge of confidential information.
- Makes use of a copylefted or third-party intellectual property.
- PI Insurance for unintentional breach of confidence Insurance is required, according to most professional body.
- It offers a high-quality service.
- Before they offer you work, a client demands that your company has it.
- Professional Indemnity Insurance for unintentional breach of confidence covers the cost of your legal defense and any damages awarded you must pay to put things right if a claim or allegation is made against your company, up to the cover level you choose.
Unintentional breach of confidence Insurance Cover
Unintentional breach of confidence professional indemnity insurance will pay for your defence costs and legal liability if a client makes an unintentional breach of confidentiality allegation about your company.
Here are some examples:
- A laptop containing sensitive information about a client is stolen from an IT professional.
- A management or business consultant sends a confidential attachment containing a client’s future business plans to a competitor by accident.
- Fitness professional (such as a personal trainer or dance teacher) sends a personalized training plan to someone who is not the intended recipient.
- Accidentally emailing a client’s profit and loss accounts to another client
- Information is saved on an unsecured system, making it vulnerable to third parties.
- In a public place, discussing a client’s trade secrets
- A recruiter sends a CV to an employer without first obtaining the applicant’s permission.
How to protect your business from Unintentional breach of confidence
It’s critical to take precautions to protect your company from data breaches. As previously stated, breaches of confidentiality can occur at any time. The majority are the result of mistakes and errors, rather than being intentional. As a result, putting best practices and procedures in place can help to reduce risk.
A breach of confidentiality can have a significant negative impact on your company’s reputation, as well as financial consequences in the form of fines or legal fees.
The following are some steps you can take to protect your company from unintentional breach of confidence:
Limit employee access to data and information
Give employees only the information they need to do their jobs. If data is highly confidential or sensitive, it should be reflected in the employee access list. The lower the risk of an unintentional breach of confidentiality, the fewer people who have access to it.
Observe all applicable data protection regulations
Make sure your data protection and privacy policies are crystal clear. This should make it clear to customers how and why information will be collected. It should also make it clear how data should be stored and handled internally.
Make use of strong passwords
Any sensitive or confidential information should be encrypted and password protected. Also, make sure that any IT equipment is password-protected to prevent data from being accessed. Cybercrime is less likely when strong IT protocols are in place. In the event that a work laptop, mobile phone, or another piece of equipment is lost or stolen, you can prevent someone else from accessing your data.
Consider establishing non-disclosure agreements
An NDA can help protect both parties by stating clearly what information can and cannot be shared.
Make sure your business insurance is up to date
While having business insurance does not eliminate the possibility of a breach of confidentiality, it can help protect you and your company if the worst happens. Knowing what coverage you need for your business and the risks you face, from professional indemnity insurance to cyber insurance, is critical.
Factors you should look for when choosing an Unintentional breach of confidence insurance provider
PI insurance for unintentional breach of confidence is available from a variety of companies. However, some of these will provide services that are better suited to your profession and business size than others.
When choosing a policy, keep the following points in mind:
- Can it be possible to customize the policy to meet your specific requirements?
- Is the service provider familiar with your industry?
- Is it possible to pay in monthly instalments?
- How known is the service provider?
FAQs about Unintentional Breach of Confidence Insurance
Is unintentional breach of confidence Insurance the same as cybersecurity insurance?
Data unintentional breach of confidence insurance is a type of insurance that only covers costs associated with data breaches. While cybersecurity insurance often covers additional situations.
Do small businesses need unintentional breach of confidence Insurance ?
Any company that stores customer or employee data digitally, regardless of size, is vulnerable to data breaches. The type of data company stores and the cybersecurity measures in place determine how vulnerable it is.
What does unintentional breach of confidence insurance not cover?
In most cases, data breach insurance does not cover indirect losses, such as lost income due to stolen intellectual property or costs associated with upgrading hardware or software to avoid another data breach. It frequently does not cover any liability a company may have if it causes another company’s data to be compromised.
