Small Business Privacy Policy Template [Ultimate Guide for 2021]

Fact-checked

Small businesses aren’t exempt from protecting users’ privacy just because they’re not large. Setting up a privacy policy is essential to ensure compliance with privacy laws while protecting your business and clients’ rights.

Fortunately, it’s easy to draft a privacy policy template for small business owners that you can use for legal protection. This article addresses ambiguities regarding small business privacy policies and provides you with examples of easy-to-use templates.

What Is a Privacy Policy for Small Businesses?

Privacy policies are legally required by privacy laws to protect information. But when customers purchase products—e.g., from a website—businesses can collect your personal data and information, including:

  • Names
  • Dates of birth
  • IP addresses
  • Phone numbers
  • Screen names and usernames
  • Emails
  • National IDs
  • Credit card numbers

This policy explains to consumers and website users what businesses do with the information they collect. According to the small business privacy policy template, business owners cannot share this information with third parties unless otherwise stipulated in the privacy policy document. Therefore, it’s wise for businesses to share the privacy policy on their website’s footer—making it easily accessible to visitors—explaining what rules and regulations it contains.

NOTE: 65% of Americans have stated that the privacy of their data and online information is a serious issue facing society.

Do You Need a Privacy Policy for Your Business?

Whenever a business—big or small—collects, uses, or shares customer information, it must have a privacy policy. There are two main reasons to have a privacy policy.

Law Requirement

Even though the US doesn’t have a federal privacy policy example for small business protection laws, it’s still universal. For instance, California mandates the privacy policy law under the California Online Privacy Protection Act (CalOPPA), which requires businesses to set up a transparent policy about information collected and its sharing with third parties. Additionally, failure to inform customers of privacy protection laws in many jurisdictions will incur legal liabilities. Other organizations that mandate privacy laws include:

  • EEA GDPR: European Economic Area General Data Protection Regulation
  • CCPA: California Consumer Privacy Act
  • PIPEDA: [Canada’s] Personal Information Protection and Electronic Documents Act

Liability Protection

Since many take their online privacy seriously, it’s essential to know how to write a privacy policy for a small business to protect against the misuse of information. As a small business owner, you’re responsible for data breaches and mishandling of customer information.

Creating your own privacy policy from a template or through a policy generator that is GDPR compliant will help you avoid hefty fines, penalties, and other liabilities attached to data breaches.

NOTE: An average data breach for a US company can cost up to $8.19 million.

Key Takeaways

Businesses that share and use information should have a privacy policy.
Sharing user information without their knowledge could infringe local laws.
Mishandling or breach of data can have serious legal consequences.
The European Economic Area, California, and Canada mandate privacy policies.

Privacy Policy Template for Small Business

Drafting your own privacy policy for an online store or website can be quite easy once you know what information it entails. When crafting your privacy policy, you should include the following five provisions.

Collected Information

Most privacy policies start with an explanation of what data and information are collected by the user. Then, describe in detail what information you will collect and how. Note the following example from an eCommerce store.

Here are the types of personal information we collect:

  • Information You Give Us

We receive and store any information you provide in relation to Amazon Services. Click here to see examples of what we collect. You can choose not to provide certain information, but then you might not be able to take advantage of many of our Amazon Services.

  • Automatic Information

We automatically collect and store certain types of information about your use of Amazon Services, including information about your interaction with content and services available through Amazon Services. Like many websites, we use “cookies” and other unique identifiers, and we obtain certain types of information when your web browser or device accesses Amazon Services and other content served by or on behalf of Amazon on other websites. Click here to see examples of what we collect.

  • Information from Other Sources

We might receive information about you from other sources, such as updated delivery and address information from our carriers, which we use to correct our records and deliver your next purchase more easily. Click here to see additional examples of the information we receive.

(Source: Amazon.com)

Consider the following privacy policy template for a website regarding what information is collected.

We collect two basic types of information – personal information (as defined in this policy) and anonymous information (as defined in this policy) – and we may use personal and anonymous information to create a third type of information, aggregate information (also defined in this policy). In particular, we collect:

  • The registration information you provide when you create an account, enter a promotion, or link your profile on a third-party site or platform with your registration accounts, such as your first name and surname, country of residence, gender, date of birth, email address, username, and password;
  • Transaction information you provide when you request information, contact Guest Services, or purchase, return, request, or exchange a product or service from us, such as your postal address, telephone number, and payment information;
  • Information you provide in public forums on our sites and applications, such as your public posts;
  • Information sent either one-to-one or within a limited group using our message, chat, post, or similar functionality, where we are permitted by the applicable law to collect this information;
  • Information we obtain from a third party, such as a site or platform provider, about the use of our applications on third-party platforms or devices;
  • Location information, including location information provided by a mobile or other device interacting with one of our sites, applications, or physical properties (including through beacon technologies), or associated with your IP address or other online or device identifier, where we are permitted by law to process this information;
  • Activity information about your use, and the use by any person(s) you authorize through your account, of our sites and applications, such as the content you view or post, how often you use our services, and your preferences;
  • Usage, viewing, technical, and device data when you visit our sites, use our applications on third-party sites or platforms, or open emails we send, or connect with our wireless Internet access services and other similar technologies, including your browser or device type, unique device identifier, and IP address;
  • Still or video images captured by cameras or readers on or around our physical properties;
  • Call recordings when you call our reservation centers or other guest services phone numbers.

(Source:privacy.thewaltdisneycompany.com)

Information Usage

As per the following example, an in-depth explanation should be given about how information is used, managed, or shared.

Trust is the foundation of the Shopify platform and includes trusting us to do the right thing with your information. Three main values guide us as we develop our products and services. These values should help you better understand how we think about your information and privacy.

  • Your information belongs to you

We carefully analyze what types of information we need to provide our services, and we try to limit the information we collect to only what we really need. Where possible, we delete or anonymize this information when we no longer need it. When building and improving our products, our engineers work closely with our privacy and security teams to build with privacy in mind. In all of this work, our guiding principle is that your information belongs to you, and we aim to only use your information to your benefit.

  • We protect your information from others

If a third party requests your personal information, we will refuse to share it unless you give us permission or we are legally required. When we are legally required to share your personal information, we will tell you in advance, unless we are legally forbidden.

  • We help merchants and partners meet their privacy obligations

Many of the merchants and partners using Shopify do not have the benefit of a dedicated privacy team, and it is important to us to help them meet their privacy obligations. To do this, we try to build our products and services so they can easily be used in a privacy-friendly way. We also provide detailed FAQs, documentation, and whitepapers covering the most important privacy topics, and respond to privacy-related questions we receive.

(Source: Shopify)

Opt-Out

As per the example below, businesses should allow users to opt-out if they don’t wish to disclose their information and the opportunity to unsubscribe from marketing materials, notifications, or surveys—giving users peace of mind and control over their data.

  • Control of Your Information

Section Overview: You have a variety of rights regarding the use and control of your user information.

Upon a verifiable request, Forbes will provide you with information about whether we hold any of your user information. Registered users may change the information stored in their member profile such as image, name, password, location, country, and the topics and contributors they are following at any time by visiting their member profile page at blogs.forbes.

All users may elect to stop receiving marketing material from Forbes or on behalf of external third-party business partners by following instructions at the end of any such email received. Your rights and controls with respect to the user information that may be collected, used, or shared in connection with cookies are outlined above.

You may request to delete or modify your personal account and/or any user information you may have voluntarily submitted to us (e.g., information that you provide to register for a Forbes event) if you wish to do so, provided we are able to verify your identity in accordance with applicable law.

You may also ask to opt-out of marketing communications from Forbes or on behalf of external third-party business partners by following the unsubscribe instructions at the end of the email received.

(Source: Forbes)

Contact Information and Disputes

Your privacy policy should include a section where you provide contact information about how users can report any misuse of data and raise disputes. Note the following example from an ecommerce website privacy policy template.

  • HOW TO EXERCISE YOUR PRIVACY RIGHTS

To submit a privacy-related request, please write to us at Skullcandy, 6301 N. Landmark Dr., Park City, UT 84098, Attn: Legal Department, or submit your request to [email protected].

Please allow up to 45 days for Skullcandy to complete your request. Please note, this Privacy
Rights are subject to exceptions, and in certain cases, Skullcandy may decline your request (see Exceptions to Deletion Request) as permitted by law or if applicable, extend your request another 45 days. However, if this is necessary, we will notify you of this extension in time.

(Source: info.skullcandy.com)

If you don’t wish to create your privacy policy from scratch, you can use a template generator that guides you through the process step-by-step.

Other

Other information and subheadings that you should include are the security measures used to protect information. For example, most sites use Secure Socket Layers (SSL) or 256-bit encryption for optimal security. Small business owners can also inform users how long they’re going to store their information.

NOTE: 97% of Americans say they’re always asked to approve privacy policies, yet only 9% read privacy policies before agreeing to it. This percentage, however, is increasing as more Americans are becoming aware of their online security.

Tips for Writing a Privacy Policy

Keep the following three tips in mind when writing your small business privacy policy template.

Readability

Use plain language to describe your policy to users. When you use vague terms or complex language, it might raise some red flags, deterring them from doing business with you.

Adapt To Your Business and Demographic

If your audience or customers are worldwide, certain members will have additional privacy rights. For example, California, the UK, the EU, and Brazil residents fall under specific privacy policies, not the universal one that gives them extra legal protection.

Only Necessary Information

Avoid asking for a long list of unnecessary information. For example, if the business transaction doesn’t require information on the user’s date of birth or marital status, don’t ask for it.

Conclusion

Setting up a company privacy policy template to outline what information you collect from users and how you use that information is vital to your legal protection. Considering that hackers attack private data via online stores and websites every 39 seconds, it’s essential to protect your small business against legal liabilities. As long as you customize the policy to your company and add it to your website’s footer, you are protected.

FAQ

How do I write a small business privacy policy?

There are many privacy policy templates available. If you follow our simple guide, you’ll be able to add all the necessary information to ensure better information protection for your small business.

Do I need a privacy policy for small business?

Yes. It’s a legal requirement for any business to have a privacy policy, no matter the size. It also protects you against liability.

Can I write my own privacy policy?

Yes, you can customize your own privacy policy to fit your business’ framework—as long as you add the necessary information and have it freely available to read by consumers. You can choose a privacy policy template for small businesses to help you write it.

What is a privacy policy for a small business?

A privacy policy is a legal document or statement drafted by a business. It discloses how an online store or website gathers a user’s information and manages or distributes it to third parties.

ABOUT AUTHOR

I’m an entrepreneur by profession and an artist by passion. I do business to pay the bills and make music to bring the thrills. Thanks to a bachelor in Business Administration, I'm well-versed in all things business. Owning a construction company certainly helps, too, but it also brings out my love for building and home protection.

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