Non-public personal information: Overview, definition, and example
What is non-public personal information?
Non-public personal information (NPI) refers to any personal data about an individual that is not publicly available and is collected, used, or shared by a business, financial institution, or other organization. NPI includes sensitive information such as Social Security numbers, financial details, medical records, and any other private data that could identify an individual or be used to access their personal assets or accounts. Protecting NPI is critical to ensure privacy and prevent identity theft or fraud.
For example, a bank may collect a customer’s financial history or account balance, which would be considered non-public personal information.
Why is non-public personal information important?
Non-public personal information is important because it is highly sensitive and its misuse can lead to identity theft, fraud, or unauthorized access to an individual’s financial or personal assets. Businesses that collect NPI are legally obligated to protect it from unauthorized access or disclosure. Failing to do so can result in legal penalties, loss of customer trust, and significant reputational damage.
For businesses, maintaining the confidentiality of NPI is not only essential for compliance with privacy laws but also for safeguarding customer relationships and avoiding costly security breaches.
Understanding non-public personal information through an example
Imagine a health insurance company that collects personal information about its policyholders, such as medical conditions, treatment histories, and Social Security numbers. This data is considered non-public personal information, and the company must implement strict security measures to ensure it is protected from unauthorized access or misuse. If this information were to be leaked, it could lead to identity theft, discrimination, or other serious consequences for the policyholders.
In another example, a financial institution may have records of a customer’s income, investment details, and bank account information. This information is private and non-public, and the bank must take steps to protect it, such as encrypting data and limiting access to authorized personnel only.
An example of a non-public personal information clause
Here’s how a clause like this might appear in a contract:
“The Company agrees to maintain the confidentiality and security of all non-public personal information provided by the Client, and will not disclose or share such information with third parties without the Client’s explicit consent, except as required by law.”
Conclusion
Non-public personal information is any private data that is not accessible to the public, and it must be carefully protected to prevent unauthorized use, theft, or fraud. For businesses, safeguarding NPI is crucial for maintaining customer trust, complying with privacy regulations, and avoiding financial or reputational damage. Understanding the importance of NPI and how to protect it is essential for any organization that handles sensitive personal data.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.