Preventing Legal Risk With an Information Security Policy: Best Practices for Small Businesses

Data and information security threats are a serious and growing concern. These risks can cause financial loss, reputational damage and regulatory scrutiny. Your small business likely stores and processes various personal, business and confidential data across different systems. If you fail to secure that information, your business risks facing data breaches and potential liability. Information security seeks to protect information in any form (physical or electronic), focusing on key issues such as confidentiality, integrity and availability. Cyber security measures seek to protect your business’ networks, devices, programs and data from being damaged, compromised or attacked.

As a small business, you must manage risks in both areas to safeguard your business. Implementing a clear and practical Information Security Policy is one effective way to help you manage information risks. This article explores how your small business can prevent risk through a strong Information Security Policy and other practical steps you can take to reduce information and cybersecurity risks. 

Why Should Your Small Business Mitigate Information Security and Cyber Risks?

Your small business will likely hold valuable information (such as customer data, employee records, and financial details). These data types can quickly attract attackers, and the consequences can be severe if they access or steal them. Cybercriminals can often target small businesses because of weaker systems and limited resources. However, many cybersecurity issues and data breaches occur because people make avoidable mistakes, such as using weak passwords. 

By taking proactive steps to secure your business, you reduce risk and show clients, regulators and business partners alike that your company takes information and data security seriously. 

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UK data protection law requires you to implement appropriate security measures for personal data. You must implement technical and organisational safeguards under the UK General Data Protection Regulation and the Data Protection Act 2018. Other laws may also apply depending on your sector and industry-specific rules. 

By protecting information, you can also better secure personal data.  By strengthening your information and cyber security measures, your business strengthens its UK GDPR compliance. Improving your cyber security and information controls can support compliance with your duties under the UK GDPR and reduce your exposure to regulatory risk.

What Does the UK’s Data Protection Regulator Say About Information Security?

The Information Commissioner’s Office (ICO) expects businesses to manage information and cyber security risks in a proactive and structured way. It has published an information security checklist with key actions. As part of this checklist, the ICO recommends that a business put an Information Security Policy in place that reflects its legal duties and business needs. The policy should set out your approach to security, assign responsibilities, and include a review process. 

The policy should consist of practical procedures and regular staff training to ensure it works. The regulator provides guidance around using a standard template and keeping your policy current. While this is an optional recommendation, it shows that implementing an Information Security Policy is best practice in the regulator’s view. 

How Can an Information Security Policy Help Prevent Risk?

An Information Security Policy can help your teams protect your business’ data and systems. It can give your team clear roles, set consistent expectations, and reduce the chance of mistakes. It can address key areas, such as data classification, access management, system and device security, and password requirements, which can all prevent risk.

Your policy should explain how your business protects data in both physical and digital forms. You should identify your business’ data types, how you classify them, and what controls apply to each. 

You should write your policy in plain language, include real-life examples, and explain how staff should apply it in practice. Your business should review the policy regularly and whenever your operations or risks change. A senior leader or security specialist should take ownership of the policy and work with teams across the business to ensure it fits your practices. By implementing a strong and clear policy, your business is better positioned to mitigate risks to its information (including personal data).

What Other Documents and Actions Can Help Your Small Business Prevent Risk?

Your Information Security Policy alone is not enough to safeguard your business, but should form part of a broader risk management framework. You should align it with other key policies, such as your data protection policy,  data retention and deletion policy, and any remote or hybrid working policies or guidance. 

Key Steps

Here are some key steps your business can take:

• if you work with third-party suppliers, you should also assess their data, information and security measures;
• you must regularly train your staff on information and cybersecurity risks. Everyone in your business (including temporary, junior, and senior staff) should understand information and cybersecurity risks and how to respond to them; 
• you should audit security controls regularly, assess risks, and conduct periodic risk assessments. You can work with external experts to test your systems; and
• your business may also wish to follow recognised standards such as ISO 27001 to guide your approach and demonstrate good practice.

By taking such measures, your small business will be better positioned to protect its information and avoid common threats.

Key Takeaways

Your small business must carefully manage information security and cybersecurity risks appropriately. A well-drafted and tailored Information Security Policy can help you meet those obligations and reduce day-to-day risks. However, to be effective, your policy must be practical, up-to-date, and supported by transparent processes, responsive training, and ongoing monitoring. 

If you need help drafting information security or data protection documents your business needs, our experienced data, privacy and IT lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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