Technology is essential for modern corporations, but it comes with significant risks. If your team stores sensitive information, you could be at risk of a data breach. This event can have several consequences for the company and its leaders.
1. Expensive lawsuits
In a data breach, affected companies and individuals could start a class action lawsuit. In 2022, there were 3,205 data compromises in the country, with approximately 353.02 million impacted individuals. Consequently, these lawsuits can be high-stakes proceedings with expensive costs.
Healthcare, financial services, and manufacturing industries commonly experience data compromises. If you work in these sectors, it is essential to prioritize prevention. Likewise, you must strengthen security measures and have an emergency plan.
2. Individual liability for corporate leaders
Corporate leaders could be held personally liable for a company’s data breach. Shareholders can claim that an individual failed to implement security measures to prevent data breaches. This argument has been used in previous lawsuits and could function as a strategy to profit from the event.
A strategic defense can be effective against such claims. In past cases, the defense has demonstrated that corporate leaders had security measures and acted in good faith. Consequently, the cases were dismissed, proving that the accused directors were not personally responsible for the data breach. However, a lawsuit can cause significant expenses, even if the results favor the leaders.
3. Reputation damage
Lastly, a data breach can damage corporate leaders’ reputations. In the age of digital media, a severe cybersecurity issue can significantly impact consumers and other interested parties. For this reason, it is essential to have a public relations contingency plan in place. Additionally, you can work alongside legal professionals who can protect your interests.
In the digital age, data breaches must be taken seriously. Preventative measures can help you avoid unexpected expenses and lawsuits. However, a defense attorney can help protect your interests if a data breach surpasses security measures.