This blog talks about the Importance of Privacy Policy for any Startup and how Startups could safeguard their relationship with customers on the long run just with this contract in place.
Why is a privacy policy important, both legally and from a customer trust perspective?
Some industries are required by law to maintain a privacy policy. These industries include banks, medical professionals, and many others. Most of the privacy regulations to which these industries are subject to apply on and off the internet. If you are not within one of these regulated industries, your prospect marketing and customer retention may still benefit from a privacy policy if your target audience believes you should have one. The emerging trend on the internet, for example, is that any credible website will post some minimal standards for user privacy.
What are the legal risks in not having a privacy policy?
If you are in a regulated industry, you must have a privacy policy that covers all issues required under the regulations governing your industry. Failure to do so may result in fines or suspension of your business license. If you are not in a regulated industry, you are under no obligation to have a privacy policy. This means you have no legal exposure for having no policy. Conversely, a poorly written policy creates potential liability every time you violate your own published policy.
When do you need to have a privacy policy?
Assuming you are not in a regulated industry, you never “need” to have a privacy policy. Do some market research to measure what your competitors are doing. But don’t assume that your competitors have accurately gauged customer demand. You should also survey your existing customer base to measure its expectations. You should consider adopting a privacy policy only if you conclude that it will enhance your prospect marketing or customer retention.
What are the important components of a privacy policy? Do you have any tips on creating one? It is impossible to discuss components of a privacy policy because every industry has different needs. The best guidance on creating an effective privacy policy for your business is:
- Don’t steal your policies from someone else’s business. You may be liable for a copyright violation. You may also be stealing something that has no practical application to your business.
- Don’t assume that your competitor’s privacy policy meets your needs. You have no idea where your competitor obtained its policy or why it adopted particular text.
- Don’t write it yourself unless you know what you are doing. If you hire an expert to write it for you, make sure the expert has actual expertise in writing policies for your industry or something closely analogous.
- No privacy policy is better than a bad privacy policy.
While a privacy policy is required in certain industries, with others it isn’t so much a requirement as it is a necessity to stay on top of the market. As more and more companies are “going green” to help out with the environment, privacy policies are becoming a part of common business practice. Website users are concerned about their privacy, and by applying a privacy policy, you are ensuring that personal information is kept private. A privacy policy is one of the most important documents on any website. It details your company’s views and procedures on the information collected from visitors. Although a privacy policy is technically a legal document, great effort should be made to craft a document that is both accurate and easy to understand, obscuring hidden clauses in reams of text is not acceptable.
The main sections are as follows:
Introduction: This section can tell your visitor a little about your organization, and any special information or functions that your website has. If your website has special conditions for collecting information from children (under 16 etc), you should state them clearly in this section.
Information Collected: Visitors have a right to know what information you are collecting. It may be obvious that you are collecting personal details by asking them to complete a form, but you should make it clear. You should also include information logged by your servers, such as hostnames and IP addresses.
Method of Collection: This details the methods you use to collect the information. Is it all automated? Do the forms visitors fill in collect other information, such as the original referrer? All of these questions will help you build a detailed description of how you collect information.
Storage of Information: How is the information stored? If you store information in a database and are located in the UK you may need to register with the government regarding the data protection act. If your servers are in the EU you will need to ask permission to transmit data outside the union, even if it stays within your company. Visitors have a right to know that you will make every effort to store their personal information in a safe and secure environment.
Contact details: It is important to be as transparent as possible, and allow users to contact you if they have a query. You should feature both an email address (or online form), as well as a real world address where a user can write to.