Personal data breach: Overview, definition, and example
What is a personal data breach?
A personal data breach happens when personal information is accidentally or unlawfully lost, accessed, disclosed, altered, or destroyed. This could be due to hacking, human error, or even physical theft of data. If a business handles personal data—like customer names, emails, or payment details—any unauthorized exposure could be considered a data breach.
For example, if an online store’s database is hacked and customer credit card details are stolen, that would be a personal data breach. Similarly, if an employee accidentally sends sensitive customer information to the wrong email address, that could also qualify as a breach.
Why is a personal data breach important?
Personal data breaches matter because they can lead to financial loss, identity theft, reputational damage, and legal consequences. Many laws, such as the EU’s GDPR or the U.S.’s state data protection laws, require businesses to take security measures and report breaches. Failing to do so can result in fines, lawsuits, and loss of customer trust.
For businesses, understanding what counts as a data breach and having a response plan in place is crucial. Quick action can minimize damage and legal risk.
Understanding a personal data breach through an example
Imagine a small e-commerce business stores customer payment details for faster checkout. A cybercriminal exploits a security flaw in the website, accessing thousands of customer records, including names and credit card numbers. Because this involves unauthorized access to sensitive personal data, it qualifies as a personal data breach, and the business may be legally required to notify affected customers and authorities.
In another example, a marketing firm collects and stores email addresses for newsletter subscriptions. An employee accidentally shares a spreadsheet containing thousands of customer emails with an unauthorized third party. Even though the data wasn’t hacked, this still qualifies as a personal data breach due to unauthorized disclosure.
An example of a personal data breach clause
Here’s how a clause related to personal data breaches might appear in a contract:
"In the event of a personal data breach involving the personal information processed under this Agreement, the Party experiencing the breach shall notify the other Party within [X] hours and take all necessary steps to investigate, mitigate, and remediate the breach in compliance with applicable data protection laws."
Conclusion
A personal data breach occurs when personal information is lost, exposed, or accessed without authorization. These breaches can cause financial, legal, and reputational harm, making it essential for businesses to have security measures and a response plan in place.
By including a well-defined personal data breach clause in contracts, businesses can clarify their responsibilities and ensure compliance with data protection laws, reducing risks if a breach occurs.
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.