What are the data breach notification laws in Washington State?

A data breach is the unauthorized access or release of someone's personally identifiable information (PII), which is any data that could reveal an individual's identity.

Data breaches can happen if an employee clicks on a link in a phishing email, if a laptop or thumb drive is stolen, or if hackers break into an online account. Accidental security breaches are another cause, such as misconfigured software that leaves data unprotected.

Every small business that handles credit cards or stores customer information is vulnerable to data breaches. IT consultants, healthcare providers, and financial institutions are among the industries with the highest risk.

Washington Revised Code 19.255.010 defines personal information as knowing a specific individual's first name or first initial and last name in combination with their:

• Social Security number
• Driver’s license or Washington identification card number
• Account number or credit or debit card number, in combination with any required security code, access code, or password that would permit access to an individual’s financial account, or any other numbers or information that can be used to access a person’s financial account
• Full date of birth
• Private key that is unique to the individual and is used to authenticate or sign an electronic record
• Student, military, or passport identification number
• Health insurance policy number or health insurance identification number
• Information about the individual’s medical history, mental or physical condition, or medical diagnosis or treatment
• Biometric data including fingerprints, voiceprints, eye retina and iris scans, or other unique characteristics used to identify a specific individual

Any business that handles PII should invest in cyber liability insurance to mitigate costs in the event of a breach.

Washington businesses that experience a data breach must respond when the private information of a state resident was acquired, or believed to have been acquired, by an unauthorized person.

According to the Washington State Legislature, data breach notifications "shall be made in the most expedient time possible and without unreasonable delay, no more than 30 calendar days after the breach was discovered."

Notification obligations can be delayed only when they would interfere with a criminal investigation by law enforcement.

Washington businesses that experience a data breach must notify any residents whose private information was compromised. Both written notices and emailed notices are permitted. If the scope of the breach affects a large number of individuals, additional actions are necessary.

For data breaches that affect more than 500 Washington residents, businesses must also notify the Washington State Office of the Attorney General. Breached third parties must notify relevant data owners or licensees immediately following discovery of the breach.

Notices to Washington residents affected by a data breach must include:

• A list of the types of personal information that were reasonably believed to have been the subject of a breach
• A timeframe of exposure, if known, including the date of the breach and the date of the discovery of the breach
• The toll-free telephone numbers and addresses of the major credit reporting agencies (TransUnion, Equifax, etc.), if the breach exposed personal information

Businesses must use the Washington State Data Breach Notification Form to report the breach event to the state offices. The form contains all relevant information regarding the breach, including:

• A synopsis of the event
• Number of affected residents
• Steps being taken to contain the breach
• A copy of the notice sent to residents
• The business's contact information

Data breaches that impact healthcare facilities and healthcare professionals are regulated by federal laws. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) includes a Breach Notification Rule that requires notification after a breach of unsecured protected health information. Businesses must notify:

• Affected individuals
• The Secretary of Health and Human Services
• The media, if over 500 residents of a state or jurisdiction were affected

Individuals must be notified by first-class mail, or by email if they've agreed to electronic communication, within 60 days of the discovery of a breach.

The cost of a data breach can be significant, which is why cyber insurance is so important for businesses that handle personal data.

Notifying those affected and paying for credit monitoring can be expensive. You’ll have to investigate and fix your security weaknesses while suffering a possible loss of income, and government fines can also be costly. You might even face a ransomware attack, where hackers shut down your computer systems and demand payment.

Small businesses most often need first-party cyber liability insurance. Also called data breach insurance, this policy provides financial protection against data breaches at your business.

You can often add this coverage to your general liability insurance or business owner’s policy (BOP), which combines general liability coverage with commercial property insurance at a discount.

If you're responsible for another company's data security, then you may need third-party cyber liability insurance. This policy covers legal expenses when a client blames your business for failing to prevent a data breach at their company.

Because most tech businesses need this coverage, it's usually included with their errors and omissions insurance (E&O) in a bundle called tech E&O.

E&O insurance, also called professional liability insurance, covers your legal costs in the event that a client sues you for making a mistake or failing to deliver on a contract. Tech E&O extends that coverage to include lawsuits related to data breaches and cyberattacks.

While any business could be at risk of a lawsuit after a breach of security, this coverage is especially important for information technology businesses, especially IT consultants, network security companies, and cybersecurity businesses that recommend software or are responsible for information security.

Businesses in Seattle and elsewhere in the state that fail to notify affected residents or the Washington State Attorney General could face severe penalties. Noncompliance could result in the attorney general bringing action against a business on behalf of affected residents to recompense them for any financial losses caused by the breach.

For businesses that store data, it's crucial to take appropriate steps to prevent data breaches.

Businesses are advised to safeguard private information through a variety of methods, such as designating one or more employees to coordinate a security program. It’s a good idea to conduct a security audit of the various types of personal information, unique identifiers, and other data elements you might have in your data systems.

Requiring strong passwords, security questions, two-step authentication, and access codes can provide reasonable data protection for your business and any service providers who access this information, reducing the chance of an unauthorized acquisition.

Complete Insureon’s easy online application today to compare insurance quotes from top-rated insurance carriers for cyber policies. Our licensed agents will help you find coverage that fulfills Washington's insurance requirements and protects your business. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.