Administrative/Regulatory
May 21, 2020
Can companies be liable if third-party contractors suffer data breaches?
An interesting question is whether a company may face liability under this statute (or based on common law theories) where one of its vendors or third-party contractors to whom it has entrusted the personal information of its customers or clients suffers a data breach. The possibility for liability in such a scenario was addressed in a recent case from Delaware.
Peter S. Selvin
Partner
Ervin, Cohen & Jessup LLP
Phone: (310) 281-6384
Email: steve@newsroompr.com
Chair of Insurance Coverage and Recovery Department
The California Consumer Privacy Act became effective on Jan. 1. Included among its provisions is the grant of a private right of action on behalf of any consumer "whose nonencrypted and nonredacted personal information ... is subject to an unauthorized access and exfiltration, theft or disclosure as a result of the business's violation of the duty to implement and maintain reasonable security procedures and practices." Civil Code Section 1798.150.
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