9. Privacy Breaches
Liability: Failing to properly inform internet visitors of your company’s privacy policy, or using confidential information in a manner not stipulated in the policy, could lead to severe repercussions. Although the monetary damage may indeed be high, the majority of the liability typically stems from the bad publicity surrounding such breaches. While many internet privacy breaches go undetected and are, therefore, not associated with any direct liability, large-scale or egregious breaches can quickly devolve into a financial and public relations nightmare.
Solution: Companies must post a detailed privacy policy which dictates the disposition and security associated with various types of private information collected from users. As it is very difficult to retroactively broaden an internet privacy policy once information has been collected, it is critical not to adopt a policy which is too restrictive in scope. Your lawyer can even word your privacy policy to address how you might use the collected information in the future. Companies must also be sure that internet privacy policies comport with all legal and regulatory restrictions pertaining to the particular type of business, the type of user providing the information and how the company will use the information.
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