Outside Legal Counsel PLC

New Michigan Data Law Increases Business Liability

For Immediate Release | Jan 03, 2007

A newly enacted state law creates new disclosure requirements for individuals, businesses, and state agencies who handle personal identifiable information. The law also imposes monetary fines to those same individuals and groups who fail to publicly disclose the breach of databases containing personal identifiable information.

Under the new law, individuals, businesses, and government agencies are required to notify consumers when a security breach puts personal information, including social security numbers, drivers license numbers, and financial information, at risk.

"The law is designed to require organizations in the state to give full disclosure when it comes to personal data," states Philip Ellison, a web designer and technology expert at Hemlock-based Quagmire Solutions, LLC. "Businesses need to make sure their business data is safe and secure, as well as have a plan in place in case the safe guards fail."

Failure to properly notify consumers of a security breach can result in a fine of up to $750,000.

"Michigan businesses and business owners must take immediate action to secure company databases, electronic records, and even paper-based documents," states Ellison.

The new law defines a breach of the security of a database has an unauthorized access and acquisition of data that compromises the security or confidentiality of personal information. Businesses would need to notify affected persons whose information was included in the breach. This data includes addresses, telephone numbers, state & federal identification numbers, employment information, health insurance identification number, mother's maiden name, and many forms of banking and financial information.

Governor Granholm signed the bill into law on January 3, 2007.


The above article was issued by an OLC attorney when he previously worked in corporate operations and communications. Because these articles are highly informative, they are provided as a service of this law firm.