Privacy Policies: Why You Need One and What To Include

While launching a website, the things that get maximum attention are the about us page, logo, graphics, SEO, etc. The legal pages, like terms of use and privacy policies, are often overlooked. But these two, while not as exciting as other parts, can either get you into or save you from a lot of trouble in the long run.

Legal GPS Pro

Protect your business with our complete legal subscription service, designed by top startup attorneys.

• ✅ Complete Legal Toolkit
• ✅ 100+ Editable Contracts
• ✅ Affordable Legal Guidance
• ✅ Custom Legal Status Report

Learn more

Terms of Use and Privacy Policy

First, let’s see what the terms of use and privacy policy are. Simply speaking, terms of use is a legal document on your website that lays out rules for using the website—that is, what a user can and can’t do. On the other hand, a privacy policy is intended to let users know what information you collect and how you manage and protect the collected information.

Do I Need a Privacy Policy Even if It’s Not Required?

Now let’s see when you should have a privacy policy. If your business is such that you are required by law to have a privacy policy, you have no option. But even if you are not required by the law to have one, be careful, because you are making commitments to users through the privacy policy, and this creates legal liability. If you are not able to adhere to the statements stated in the privacy policy, you may be in trouble. Companies have been penalized with huge fines by regulatory authorities for not adhering to their privacy policy.

In short, if you are not required by law to have a privacy policy and are not able to adhere to the statements made in it, it is better not to have one. Only terms of use may be sufficient for you. But if you do decide to create a privacy policy, make sure it is tailored to your business.

To Comply With Law and Limit Liability

Although the state law may not require your website to have a privacy policy, you still need one because you may have users in states where the law requires it. For example, if your website has users in California, you need to follow the rules set by the California Online Privacy Protection Act (CalOPPA). Moreover, if your website collects personal information from children under 13, you must comply with the Children’s Online Privacy Protection Act (COPPA). Even if you are confident that you don’t have users in such states, it is still a good practice to have one.

Imagine you mailed some promotional material to the users of your website, and one of the users is aggrieved by this and wants to sue you. If your privacy policy clearly states that you may use the user’s personal information for promotional activities and that the user was given a chance to opt-out, you are protected. If not, you could be facing significant legal issues.

Required by Google

If you want to use Google AdSense, Google AdWords, or Google Analytics, you need to have a privacy policy. Not having one may result in Google terminating access or even suing you for violating their terms of use.

To Obtain and Use Data for Your Benefit

You can collect important visitor information like names, email addresses, etc., as well as track the habits of visitors. If you have a well-defined privacy policy that clearly states that you may use this data for marketing purposes, such as sending promotional material, and you give visitors the chance to opt-out, you can use this data to promote your business. In the absence of a privacy policy, you may be sued for using this data.

Nowadays, people value transparency in their dealings. A privacy policy allows you to be transparent with your users, making them feel safe in entrusting their information to your site. Just think about how insecure you feel when submitting even an email address on a website that doesn’t have a privacy policy.

Invest Time and Thought Into Your Terms of Use and Privacy Policy

These were just a few reasons for having these legal documents, but given the speed at which technology and awareness of user rights are evolving, there are countless reasons to have these documents. Simply having a few well-crafted legal pages on your website can do a lot for you.

Most often, I see startups delay adding these legal pages to save on legal fees, or they copy them from another website or use a template available online. This is a big mistake, as companies have been fined thousands of dollars for not adhering to the statements made in their privacy policies.

For example, if your privacy policy says that visitor data is kept safe (because you copied it from somewhere without knowing what it means) and you do very little to keep it safe, you could be sued by a user and required to pay a heavy penalty. Even if you have customized privacy policies, you need to update them as your privacy practices change.

Essential data privacy regulations for businesses

Key Elements of a Privacy Policy

A privacy policy needs to be tailored to your specific business, as its contents depend on how you collect and manage user data. Here are some key elements to include:

1. Introduction

Provide a brief introduction that identifies your business and explains your commitment to privacy. For example:

“[COMPANY NAME] (“Company,” “we,” “our,” or “us”) respects the privacy rights of its online visitors (“you,” “your”) and recognizes the importance of protecting the information collected about them.”

This introduction sets the tone for the privacy policy and assures users that you take their privacy seriously. It should be simple, direct, and convey your commitment to data protection.

2. Applicability of the Policy

Clarify what information your privacy policy applies to, whether it’s information collected on your website, through email, mobile applications, or third-party advertising. This will help users understand the scope of your policy. Be specific about the platforms and contexts where your policy applies.

Sample Provision: “This Privacy Policy applies to information we collect through our website, email, mobile applications, and any third-party services integrated with our platform.”

3. Information You Collect

Specify what types of personal data you collect. This can include:

• Personal Identifiable Information (PII): Names, email addresses, telephone numbers, and other data that can identify an individual.

• Automatic Information: Data collected through cookies or other technologies, like browsing behavior, IP addresses, or device details.

Example: “We collect personal information such as your name, email address, and phone number when you register on our site. We also automatically collect information such as your IP address and browsing behavior through cookies.”

Sample Provision for Automatic Information: “Our website uses cookies to collect information about how you interact with our site. This data helps us understand user preferences and enhance your browsing experience.”

Legal GPS Pro

Protect your business with our complete legal subscription service, designed by top startup attorneys.

• ✅ Complete Legal Toolkit
• ✅ 100+ Editable Contracts
• ✅ Affordable Legal Guidance
• ✅ Custom Legal Status Report

Learn more

4. How You Use Information

Describe how you use the data you collect. It’s important to be transparent about all purposes for which the data is used. Examples include:

• To provide services or products users have requested.

• To improve user experience on your website.

• For marketing or promotional purposes, if applicable.

Example: “We use your information to deliver the products and services you request, personalize your experience on our website, and send you promotional content if you have opted in to receive it.”

Sample Provision: “Your data may also be used for analytical purposes, such as understanding trends in user behavior and improving the overall functionality of our platform.”

5. Disclosure of Information

Detail to whom you may disclose personal data. This can include:

• Third-Party Service Providers: Businesses that help you operate your website or provide services to users, such as payment processors or email marketing services.

• Legal Requirements: Situations where disclosure is necessary to comply with the law or protect the safety of individuals.

Example: “We share your information with trusted third-party service providers who assist us in delivering our services. We may also disclose your data to comply with legal obligations, enforce our terms, or protect the rights and safety of our users.”

Sample Provision for Third-Party Providers: “We may share your personal information with analytics providers, hosting partners, and payment processors to facilitate the operation of our services. These third parties are obligated to protect your data and use it only as instructed by us.”

6. Data Security

Let users know how their data will be protected. Mention the safeguards you have in place, such as encryption, access control, and secure data storage.

Example: “We use SSL encryption to protect sensitive information transmitted online and employ access control measures to restrict access to your data.”

Sample Provision: “All user data is stored in secure servers with restricted access. We also implement physical, electronic, and managerial procedures to safeguard the information we collect.”

Note: Be specific, but avoid making broad statements that may not be realistic to fulfill. It’s better to be transparent about your data protection capabilities and the measures you have taken.

7. User Rights and Choices

Provide details about users’ rights, such as:

• Access and Correction: Users have the right to access and correct their personal data. Explain how they can request changes.

• Opt-Out: How users can opt out of data collection or marketing communications.

Example: “You may access and update your personal information by logging into your account. If you wish to opt out of receiving marketing communications, you can do so by following the instructions in the email or contacting us directly.”

Sample Provision: “Users can request deletion of their personal information by contacting us at [contact email]. We will respond to such requests within 30 days.”

8. Changes to the Privacy Policy

Explain that your privacy policy may change and how users will be informed of these changes.

Example: “We may update this Privacy Policy from time to time. If we make any material changes, we will notify you by posting a notice on our homepage or sending you an email.”

Sample Provision: “Changes to this Privacy Policy will be posted on our website, and we will update the ‘Last Modified’ date at the top of this document. Continued use of our services after such changes indicates your acceptance of the updated policy.”

9. Children’s Privacy

If your website is not intended for children under the age of 13, mention that you do not knowingly collect information from children. This can help protect you from additional compliance requirements under COPPA.

Example: “Our website is not intended for children under 13 years of age. We do not knowingly collect personal information from children under 13. If we become aware that we have collected such information, we will delete it promptly.”

Sample Provision: “If you are a parent or guardian and believe that your child under the age of 13 has provided us with personal information, please contact us at [contact information], and we will delete such data.”

10. Contact Information

Provide a way for users to contact you if they have questions about the policy or how their data is handled.

Example: “If you have any questions regarding our privacy practices, please contact us at [contact information].”

Sample Provision: “For any inquiries about this Privacy Policy or how we use your information, you can reach us at [contact email] or [phone number].”

Final Thoughts

Having a well-drafted privacy policy is essential for your website. It helps ensure compliance with the law, builds trust with your users, and minimizes your liability. Remember, it’s always best to consult a legal professional when drafting your privacy policy to ensure it accurately reflects your data practices and meets all applicable legal requirements.

If you’re collecting personal data or sensitive information from users, make sure you understand your obligations and have the right safeguards in place to protect that data. A well-crafted privacy policy not only helps protect your business but also enhances your credibility and trustworthiness in the eyes of your customers.

Do I need a business lawyer?

The biggest question now is, "Do I need a business lawyer?” For most businesses and in most cases, you don't need a lawyer to start your business. Instead, many business owners rely on Legal GPS Pro to help with legal issues.

Legal GPS Pro is your All-In-One Legal Toolkit for Businesses. Developed by top startup attorneys, Pro gives you access to 100+ expertly crafted templates including operating agreements, NDAs, and service agreements, and an interactive platform. All designed to protect your company and set it up for lasting success.

Legal GPS Pro

Protect your business with our complete legal subscription service, designed by top startup attorneys.

• ✅ Complete Legal Toolkit
• ✅ 100+ Editable Contracts
• ✅ Affordable Legal Guidance
• ✅ Custom Legal Status Report

Learn more