If your business handles the personal, medical, sensitive, or classified data of individuals or government organizations, the law requires you to follow strict compliance regulations. Doing so is neither fun nor easy. However, it’s necessary to avoid crippling business consequences. We’ve put together a list of the negative things that can happen when you violate regulatory compliance.
Fines and Additional Costs
A HIPAA compliance violation fine can range in cost anywhere from $100 to $50,000 per violation, and up to $1,500,000 per category/per year. If you mishandle records, your network is breached, devices are lost or stolen, your insurance coverage runs out, etc… you’re in violation of compliance. When you receive a violation, the money you could be spending growing your business and taking care of critical projects now goes toward paying for mistakes that could have been prevented. Not only that, but when you violate compliance your insurance premiums increase. Thus, creating an extra cost to your business.
Required External Audits
If you’re found violating compliance, chances are you’ll be required to submit to a series of comprehensive external audits that show how your business has (or has not) adhered to regulatory guidelines. An independent accounting, security, or IT consultant will come in and evaluate how thorough and secure the measures you’ve taken to be compliant are or aren’t. What an auditor examines largely depends on the type of violation you’ve committed, whether your company is public or private, and what kind of data your business is privy to.
Preparing for an audit monopolizes valuable resources. Not only do you have to take time out of your workday to attend the audit, your team will likely spend hours preparing the mandatory documentation. All time you and your team could be using to tackle critical business projects and serve customers.
The ample amount of national and industry-specific compliance regulations means that there’s a multitude of ways you can be in violation. Depending on the kind of regulatory infraction and the severity of your violation, legal action could be taken against you.
Nobody wants to find themselves in the midst of a lawsuit. Valuable resources: operational delays, lost time, unexpected legal costs, negative press, customer frustration, etc. These are all things that halt business growth and can destroy the progress you’ve made toward building your company.
Finally, when you fail to follow compliance regulations, you risk seriously damaging your company’s reputation. 31% of consumers said they discontinue their relationships with an entity following a data breach. Thus, when you violate compliance standards and your customers find out (as you are required by law to report it), you should be prepared to lose more than a few of them. Point being, when your company violates compliance, you hurt your business image, affecting current client relations and bringing employee morale down.
How to Avoid Violating Regulatory Compliance
Failure to maintain compliance isn’t a good option for your company. Ensuring you’re employing protocols and adopting the correct solutions to prevent violations is. Partnering with an MSP skilled in providing regulatory compliance support will help your business avoid violation headaches, allowing you to focus more time on other critical projects. Our goal is to help your business avoid suffering the consequences of compliance violations. If you’d like to learn more about how your business can ensure compliance in all aspects of its infrastructure, reach out, our team of experts is always here to help.