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3 ways cybersecurity breaches invite legal action

On Behalf of | Dec 20, 2023 | Business Litigation |

In today’s digital age, businesses rely heavily on technology to streamline operations and connect with customers.

With the increasing reliance on digital platforms comes the growing threat of cybersecurity breaches. These breaches not only jeopardize sensitive data but also expose businesses to the risk of legal action.

1. Data vulnerability and legal ramifications

When a business experiences a cybersecurity breach, it exposes customer information to unauthorized access. This can lead to identity theft, financial fraud and other malicious activities. In turn, affected customers may hold the business accountable for failing to protect their data. Laws and regulations require businesses to safeguard customer information. Failure to do so can result in legal consequences.

2. Breach of contract and customer trust

When customers engage with a business, they expect responsible handling of their information. A cybersecurity breach can erode trust and lead to a breach of contract claim. Customers may argue that the business failed to uphold its end of the agreement to protect their data, leading to potential lawsuits seeking damages for the breach of trust and contractual obligations.

3. Operational disruptions and financial losses

A cybersecurity breach can disrupt a business’s operations, leading to financial losses. Customers affected by the breach may pursue legal action to recover financial damages incurred as a result of the disruption. This can include expenses related to identity theft protection, credit monitoring and other measures taken to mitigate the impact of the breach.

A recent report estimated that the average cost of a data breach for businesses was $4.45 million in 2023. On top of the costly damage the breach itself can cause, it may also open the doors for other litigation.


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