Double Whammy in Laptop Theft Liability

Posted on September 01^st 2010

Not only did the Yorkshire Building Society lose a laptop with customers' details on it in April but last week they became the criminal as well as the victim.

In a case that will have many businesses reaching to check the terms of their liability insurance, the building society was found in breach of the Data Protection Act by the Information Commissioner's Office (ICO).

Every time a laptop theft is reported the same questions are asked. Why was there sensitive information on the laptop? And if it had to be there, why was it not encrypted? The answer is always the same: user training is required to make people aware of the dangers.

Whether or not the manager concerned had been trained, to write down the passwords then leave the pieces of paper with the laptop (which is what happened) is rank incompetence. Anyone in a position of responsibility at any time in the last thirty to forty years just has to be aware of the importance of keeping passwords private.

Details of any punishment are not yet forthcoming but Zurich Insurance was fined £2.28 million, also last week, by the Financial Services Authority. That was for losing a backup tape, also unencrypted, containing policyholders' details.

Liability insurance to cover these incidents is a must but having stringent procedures to prevent them happening in the first place is perhaps even more important.

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