A 'Compliance First' Mindset Limits Liabilities for SMBs
By adopting a Compliance First strategy, when choosing solutions and vendors, you will identify those that do not comply with your requirements, eliminate them from your selection process, and then select from the rest. It also means evaluating your current solutions and vendors and replacing those that cannot support your compliance requirements.
In simple terms, compliance is anything someone else makes you do. This means laws, regulations, contracts, and even the terms of a cyber insurance policy.
Failure to act responsibly can have devastating results — hefty penalties, lawsuits, investigations, and the failure to have insurance cover big claims that can exceed $1 million.
If you think compliance is unimportant for you or only applies to enterprises, think again. Not one single business is immune to compliance regulations, which is in fact, a good thing. By knowing your business must be compliant, you can avoid fines and penalties, improve operational safety, improve public relations, prevent attrition and above all, ensure that liability insurance claims pay out in the event of an incident. Compliance has a measurable Return on Investment (ROI).
By making the ‘Compliance First’ approach your first step, you can meet minimum regulatory requirements to protect against fines while also staying in compliance with liability insurance requirements. After this, you can improve your business’ compliance posture further by adopting additional measures.
A Single Compliance Mistake Can Invalidate Liability Insurance Claims
Many small and medium-sized businesses prefer to use free or the most affordable solutions possible. If you’re one of them, keep in mind that this is not a safe practice. Without solutions that meet security, encryption and reporting standards outlined by regulations that you must abide by (HIPAA, CMMC, PCI-DSS and GDPR), you could face three key problems:
1) Suffering a preventable catastrophic breach
2) Risk of non-compliance and subsequent fines
3) Risk of violating and nullifying liability insurance policies, leaving you financially exposed
Using cheap or low-cost non-compliant solutions may be tempting but it can cause your business to assume all the reputational and financial risk and cost in the event a compliance violation comes to light. Remember that you do not have to use a bunch of non-compliant solutions to invalidate your insurance; even using just a single non-compliant solution can cause your claim to be denied.
All your insurance claims that cover compliance regulation infractions specific to HIPAA, CMMC, GDPR or PCI-DSS can be invalidated by a single act of negligence. If the vague regulatory guidelines overwhelm you, you are not alone. But it is worth taking the time to learn more about your requirements, so your organization can become adequately protected.
The Cost of Non-Compliance
Many businesses think of compliance spending as an unrewarded cost of business rather than considering it as an investment in protecting assets. This leads to less spending on compliant software or even under-staffing of compliance teams. If your business eventually ends up being non-compliant, it can have devastating reputational and financial consequences.
HIPAA penalties often exceed $ 1 million. Defense contractors can lose their main source of revenue by not complying with cybersecurity requirements.
If you accept credit cards, PCI-DSS violations can draw penalties ranging from $5,000 to $100,000 per month by payment providers (VISA, Discover and others). Penalties depend on the volume of clients and transactions.
GDPR violations lead to hefty violation fines worth 2% to 4% or more of company revenue based on the severity of the violation.
Even the information you have about your workforce is protected by state and federal laws.
Begin With a ‘Compliance First’ Approach for Product Selection
A ‘compliance first’ approach covers a broad range of critical considerations to keep a business compliant. However, if you do not know where to begin, start with a business tool audit. The internal tools to audit for compliance are:
· Voice services like VoIP
· Cloud storage and file hosting
· Document sharing and transfer services
· Productivity tools
· Communication tools
· Any digital tool, product or service used for business
Many regulations require data, including voice messages and emails, to be encrypted in transit and when stored. Find out if your version is compliant by reviewing each solution’s product sheet or release notes. If it’s still unclear whether or not the solution provides the type of compliance you’re looking for, contact the technology vendor directly to get an independent audit report of their compliance with the requirements you must meet.
The ‘Compliance first’ approach can help develop a compliance-oriented culture within your business, thus preventing your business from falling into the quicksand of non-compliance.
We understand that implementing the ‘compliance first’ approach can be a bit challenging.
Don’t worry.
We can help you seamlessly integrate this approach into your business operations to meet legal and insurance obligations.
Get in touch with us today to get started.
Article curated and used by permission.