Working from home offers freedom and flexibility, but it also opens the door to data breaches that can jeopardize your client relationships—and your bottom line. Follow these five tips to protect the integrity of your data.

Whether you telecommute for your corporate job, sell homemade crafts online, or practice law from the living room, you are responsible for protecting the personal information of anyone you do business with. No matter how small your operation, or even if you only occasionally work from home, your clients trust you to protect their data—and legislation in 46 states requires that you do so.

A data breach can happen when we lose a laptop with credit card numbers, unknowingly download a virus, or even leave open a file drawer containing paper records. Businesses must notify clients whose information is compromised; a breach can seriously undermine their trust in your company. In addition to lost business, notification alone can cut deeply into your earnings: One small company with three employees recently spent $25,000 sending data-breach-notification letters to customers.

This year, resolve to protect your data with these five steps:

1.    Wall off your personal and professional lives. If possible, keep two computers, and don’t use your work computer for personal email, online shopping, social networking or other activities that invite in hackers. Let your spouse and children know that your business materials—both digital and physical—are off-limits.
2.    Take a hard look at the data you keep—and how you keep it. Safely purge everything you don’t need (cross-shred paper documents; use a wiping utility to permanently erase hard drives). Take what’s left and lock it up: Paper files can’t be password-protected, so they’re particularly vulnerable—keep them, as well as external hard drives and computers, in locked cabinets or rooms.
3.    Keep computers, smartphones, and other technology secure and up to date. Use “strong” passwords with numbers, symbols and characters; firewalls; and antivirus, anti-malware and anti-spyware programs. Encrypt files and emails. Always use the latest operating system and download recent security patches. Avoid wireless networking—it’s inherently insecure. If you must use it, skip the coffee shop network and use a mobile broadband plan with a trusted provider.

4.    If you telecommute, work closely with your company’s IT and security departments to ensure your home office meets their standards for protecting off-site company data; follow their protocols to the letter. If you process credit card transactions, choose a payment application that’s fully compliant with current regulations and has good customer ratings. If you use a vendor for payments, do your due diligence—carefully read their conditions and privacy terms, and thoroughly research their reputation and any recent breaches.

5.    It’s impossible to totally protect against a data breach, but you can be prepared. Learn which state laws apply to your business (these may be in states in which your customers live, not just where you work). Ask your insurance carrier about cyber-liability and data-breach coverage. Educate your employees and anyone who has access to your workspace and materials about your responsibility. Know your company’s data breach plan, or have your own in place, and let your customers know what it is—your proactive approach is a great marketing tool. And if the information you store is compromised, moving swiftly and confidently will restore your clients’ faith and protect your livelihood.

Remember that a home-based business is just as vulnerable to data breaches as any other business. Take action to tighten security, and don’t leave you or customers exposed.

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