Embracing a ‘Compliance First’ Philosophy Safeguards SMBs with SPIN Compliance

Opting for a Compliance First strategy, particularly in collaboration with SPIN Compliance, empowers small and medium-sized businesses (SMBs) to minimize liabilities. This approach involves scrutinizing solutions and vendors, eliminating those that don’t align with your compliance requirements, and selecting from the compliant options. It also entails evaluating existing solutions and vendors, replacing those that fall short in supporting your compliance needs.

In essence, compliance encompasses obligations imposed by external entities, such as laws, regulations, contracts, and the terms of cyber insurance policies. Neglecting these responsibilities can result in severe consequences, including hefty penalties, lawsuits, investigations, and the risk of insurance failing to cover substantial claims exceeding $1 million.

Dismissing the notion that compliance is solely relevant to larger enterprises is a misconception. All businesses are subject to compliance regulations, which, in reality, is advantageous. Awareness of the necessity for compliance enables businesses to avoid fines, enhance operational safety, bolster public relations, prevent attrition, and, crucially, ensure that liability insurance claims are honored in the event of an incident. Compliance, therefore, yields a measurable Return on Investment (ROI).

Making the ‘Compliance First’ approach the cornerstone of your strategy allows you to meet minimum regulatory requirements, protecting against fines and aligning with liability insurance prerequisites. Subsequently, you can enhance your business’s compliance posture by implementing additional measures.

A critical aspect to note is that a single compliance mistake can invalidate liability insurance claims. Many SMBs, in an attempt to cut costs, opt for free or budget-friendly solutions. However, using solutions that do not meet security, encryption, and reporting standards stipulated by regulations (such as HIPAA, CMMC, PCI-DSS, and GDPR) poses significant risks:

1. Vulnerability to preventable catastrophic breaches
2. Risk of non-compliance and subsequent fines
3. Potential violation leading to the nullification of liability insurance policies, leaving the business financially exposed

Choosing cheap, non-compliant solutions may seem tempting, but it places the burden of reputational and financial risk squarely on the business. Even a single non-compliant solution can lead to claim denial for insurance covering specific compliance regulation infractions.

Recognizing compliance spending as an investment in asset protection is crucial. Viewing it as an unrewarded cost can result in insufficient spending on compliant software and understaffing of compliance teams, potentially leading to devastating reputational and financial consequences for non-compliant businesses.

Penalties for non-compliance can be severe, with HIPAA penalties often exceeding $1 million, defense contractors risking revenue loss, PCI-DSS violations incurring penalties ranging from $5,000 to $100,000 per month, and GDPR violations leading to fines based on company revenue.

Commencing with a ‘Compliance First’ approach for product selection involves a comprehensive evaluation of critical considerations to maintain business compliance. Starting with a business tool audit is advisable, covering various internal tools such as VoIP, cloud storage, file hosting, document sharing, productivity tools, communication tools, and any digital tool used for business. Many regulations mandate encryption of data, including voice messages and emails, during transit and storage.

Choosing the ‘Compliance First’ approach fosters a compliance-oriented culture within the business, preventing it from falling into the pitfalls of non-compliance. While implementing this approach may seem challenging, SPIN Compliance stands ready to assist in seamlessly integrating it into your business operations to meet legal and insurance obligations. Contact us today to get started on your compliance journey.