As an entrepreneur, you’ve likely heard the term “privacy policy” thrown around, but what exactly is it? And more importantly, do you need it for your business?

In a nutshell, a privacy policy is a document that outlines how your company will collect, handle, share, store, and safely destroy the personal information of customers, employees, and vendors. Typically, privacy policies go unnoticed by small business owners since you’re busy growing your business. But remember, the law requires companies to have privacy policies if they collect or distribute private information about individuals. With new privacy laws coming into effect across the United States, you should take privacy compliance seriously, especially when handling sensitive data.

Putting a privacy policy in place is a massive step towards privacy compliance for any business. If you don’t have a privacy policy, you’re at risk of data privacy breaches that could be disastrous for both your company and you as an individual. Information about your users can fall into the hands of hackers or may be purchased by brokers who will try and sell it for profit online. Not good news for anybody! Privacy breaches can severely affect your company’s reputation. Your name might even be slung around the net because of these privacy violations. Protecting users’ privacy also protects you and your business.

However, it’s not enough to create one and then forget about it. Privacy laws are constantly evolving and expanding, so you must regularly review and update your privacy policy. Doing so will help your business’ privacy management efforts in several ways.

Ensure privacy compliance consistency across channels

Privacy policies are among the first documents you put in place when launching a privacy management program in your organization. After that, they become critical to all privacy compliance efforts throughout the year. Unfortunately, they can quickly fall out of sync with your current privacy practices or changing regulations. For instance, depending on your jurisdiction’s privacy law, your company may be required to conduct a “privacy impact assessment” for any new or modified product that involves the processing of personal data. One of the requirements for achieving this is to show your privacy policies and other documentation.

Help employees understand how your business should handle customer data

With increased international pressure on companies to protect consumer privacy, it’s more important than ever to make sure employees understand what information you collect and how and why you’re using it. While privacy policies aren’t the only channel for privacy training and awareness activities, they can provide a valuable resource to anyone who needs to understand your privacy practices.

Help customers understand how their personal data is protected

As privacy laws and regulations continue to evolve across markets, you may find yourself fielding customer questions about privacy policies. For example, they may want to know what information you collect and under what circumstances you share it with third parties. In response to these inquiries, you should be able to point customers toward an up-to-date privacy policy that clearly articulates:

• Which categories of personal information you’re collecting
• The purposes for which you are using that information
• The amount of time you will retain the personal information
• Whether you will share it with third parties
• The consumer’s privacy rights under local privacy laws

For privacy policies to truly protect your business, you need to update your company’s privacy policies regularly. Of course, privacy compliance is tedious and time-consuming! But privacy policies are the foundation of privacy compliance. You can’t run from it. If you’re concerned about bandwidth and the cost of handling all of this internally, we can help. Skills4Good AI is the one-stop platform for privacy and AI compliance — we’ll cover privacy management while you focus on growing your business.