RISK INSIGHTS
Whether it’s managing inventory, sales, financing or parts, you are probably well aware of the important role your dealership management system plays in your day-to-day operations. However, it’s important to think about what all of this localized data means from a security standpoint.
A valuable resource to you could be even more profitable for data thieves looking to access customers’ personal information. You have a legal responsibility to do everything you can to protect the personal information given to you by customers. It is important that you evaluate the security of your dealer management system and address any problems that you find.
Why You Need Security
Since they are so frequently used, it’s easy to underestimate the value of the information that dealer management systems hold. The benefit of these systems is that they are all-encompassing, providing you with the simplicity of one main resource for all of your company’s clerical information.
Management systems help your business manage its inventory, put in orders to suppliers, pay employees, calculate sales and even calculate financing information for customers. All aspects of your business are touched by your management system.
A breach could mean the loss of important company data, such as payroll, sales and tax information, and customers’ personal and financial information. In the aftermath of a breach, not only could you face fines, but you could also be held liable for damages suffered by impacted customers.
Legal Responsibilities
The Federal Trade Commission (FTC) regulates businesses with respect to how they must protect customer information. Businesses that do not keep their management systems or other data storage systems secure and up to FTC standards can face hefty fines. If a breach occurs, the FTC also mandates how and when your business informs those whose information has been put at risk.
Protecting Your System
To prevent fines and other costs associated with data breaches, it is important that you institute a written security plan that outlines how you will protect customer information as well as how you will notify impacted parties in the event of a breach. You should also establish a program to evaluate the security of your system on an ongoing basis. Assign these duties to a competent employee so they can keep your security initiative on track for long-term success.
One important security feature to use is a firewall designed specifically to prevent any unauthorized access from outside of your network. However, be aware that as technology changes, data thieves will become more resourceful in bypassing new security measures. To prevent a faulty or outdated system from contributing to a breach, have you security features checked regularly by an IT specialist. Contact Utica National Insurance Group for more information on technology and cyber security.
© 2011 Zywave, Inc. All rights reserved. | Provided by Utica National Insurance Group
This Risk Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.
This information and any attachments or links are provided solely as an insurance risk management tool. They are derived from information believed to be accurate. Utica Mutual Insurance Company and the other member insurance companies of the Utica National Insurance Group (“Utica National”) are not providing legal advice or any other professional services. Utica National shall have no liability to any person or entity with respect to any loss or damages alleged to have been caused, directly or indirectly, by the use of the information provided. You are encouraged to consult an attorney or other professional for advice on these issues.