How To Write A Data Protection Policy (+ Free Template)

When it comes to writing a data protection policy for a small business, it feels like there’s a lot you should know, and even more you can get wrong. If you’re finding the world of data protection confusing and intimidating, you’re definitely not alone.

There’s lots of advice out there, but not a lot of it is tailored to small businesses. That’s where I come in. Together, we’ll cut through the jargon and demystify the much-feared data protection policy.

What is a data protection policy?

Safeguarding personal, important or sensitive information from loss, corruption or harm is known as data protection. A data protection policy sets out how a business handles and protects all the information collected and processed about its people — whether that’s employees, customers, suppliers or someone else.

Your data protection policy will act as a set of rules and protections and should be aligned with the Data Protection Act 2018.

A legally sound data protection policy ensures that an organisation:

Complies with data protection law and follows good practice within the public interest
Protects the rights of their members of staff, customers, and other stakeholders
Is transparent about storing and processing data
Is protected from the risks of a data breach

A data protection policy communicates your commitment to protecting personal data and complying with the UK GDPR (the UK General Data Protection Regulation). It also sets out how you will ensure ongoing compliance with the regulations through your internal processes, your company values, and the use of technology.

Why is a data protection policy important?

You may already be securing data safely, but having a written policy demonstrates to others that you’re aware of your obligations and take all the necessary steps.

Having a current, legally compliant data protection policy makes it easier to:

Ensure legal compliance for your business as a data controller and/or data processor
Have clear rules on how to process, share, audit, and delete data when necessary
Inform your employees and customers about their legal rights
Protect yourself against any legal prejudice
Understand how long you can keep your customer and employee data for
Balance employee privacy by keeping their data safe

Do you need a data protection policy for small businesses?

Data protection laws apply to all businesses, regardless of whether they’re big or small. If you’re in business, you should have a policy that explains your approach to data and how you keep it safe.

As a small business, a data protection policy will:

Give you a framework for ensuring UK GDPR compliance
Help to explain the UK GDPR to your team
Show your commitment to preventing data breaches

The GDPR is extremely complex, which is why it remains so daunting. A data protection policy breaks down the regulation so it’s more easily understood and implemented — making it feel more relevant to your business and what you do.

It’s not just the data privacy laws themselves that can be overwhelming. Small businesses often face a unique set of challenges when it comes to data protection and compliance, like:

Ensuring legal compliance with fewer resources
Process data classification can require a lot of work
Developing procedures for obtaining and managing consent for data can take a lot of time
Developing solid procedures to respond to data breaches and security can be challenging in a small business
Hiring external support can be very costly

While developing your own policy and procedures takes time, it’s worth doing so that you can better understand what’s expected of you and show that you’re compliant with your legal requirements.

What should a data protection policy include?

You don’t have to figure this out alone. As a fellow small business, we’ve been through the process and developed a data protection policy that meets our needs.

Here’s how we break down our data protection policy at Charlie:

Data protection policy definition

Outlining the policy, your legal obligations, and who the policy applies to.

Scope of the policy

This applies to all personal data processed, regardless of where it’s stored and whether it’s about past or present employees, workers, customers, suppliers, or any other data subject.

Data protection principles

Adhering to the UK GDPR principles, which state that all personal data is:

used fairly, lawfully, and transparently
used for specified, explicit purposes
used in a way that is adequate, relevant, and limited to only what is necessary
accurate and, where necessary, kept up-to-date
kept for no longer than is necessary
handled in a way that ensures appropriate security, including protection against unlawful or unauthorised processing, access, loss, destruction, or damage

Fair, lawful, and transparent processing

Processing personal data fairly, transparently, and on a lawful basis.

Processing personal data with the consent of the data subject.

Note: Consent can be difficult to obtain under the UK GDPR. It must be “freely given, specific, informed and unambiguous”.

Accountability

Responsibility for introducing and maintaining appropriate technical and organisational measures to ensure compliance with the data protection principles. Confirming that you are registered with information governance bodies, such as the Information Commissioner's Office (ICO), if appropriate.

Purpose limitation

Collecting personal data for explicit and legitimate purposes that are clear up front. Data that’s incompatible with these purposes will not be processed.

Data minimisation

Processing data that’s strictly necessary and relevant, and deleting or anonymising it when it’s no longer needed.

Accuracy

Checking the accuracy of any personal data when it’s collected and at regular intervals, and deleting or correcting inaccurate or out-of-date personal data.

Storage limitation and data retention

Keeping personal data in an identifiable form for no longer than necessary, and only for the stated purposes for which it was collected and processed.

Integrity and confidentiality

Securing personal data through technical cybersecurity and organisational measures against unauthorised or unlawful processing, and against accidental loss, destruction, or damage. Sharing how this also applies to protecting special categories of personal data, such as biometric data, with adequate security measures.

Personal data breaches

Notifying the appropriate regulator, and in some cases the data subject, of a data breach — unless it’s unlikely to risk the rights and freedoms of individuals. Recording all personal data breaches.

Data subjects’ rights

Regarding rights that relate to the processing of personal data. For example:

Withdrawing consent to the processing of their personal data or requesting deletion of their data
How to use the right of access
Requesting access to their personal data through a subject access request
Preventing the use of their data for direct marketing

Records management

Keeping full and accurate employee records of all data processing activities as required by law. Including:

Data subjects’ consent to the processing of their personal data
The purposes of the data processing
Recipients of the personal data
Name and contact details of your data protection officer

Direct marketing

Abiding by marketing rules and privacy laws. (Customers need to give their consent to be sent electronic direct marketing like emails or texts.)

Sharing personal data with third parties under specific circumstances. For example:

The third-party needs the data to provide the contracted services
The privacy notice has made it clear that data transfers take place to third parties for express purposes.

Download your free data protection policy template for UK small businesses

As a fellow small business, at Charlie we understand that talking about data protection legislation is one thing, but putting it into action is quite another. That’s why we’ve put together this free data protection policy template for UK small businesses.

It’s designed to be clear, simple to read, and easy to personalise. This means you can skip the hard steps and focus instead on adjusting the policy so it matches your unique business needs.

How to write and personalise your small business data protection policy

Whether you DIY your own policy or use our free data protection policy template, it’s important that the document reflects your business and how you operate.

Here’s our best advice on how to write, customise, and update your data protection policy — from one small business to another:

Use headings and plenty of white space to make the document easier to read
Make sure your language is clear and easy to understand
Use language that matches your brand, culture, and personality
Review your policy every year or when you carry out a data protection impact assessment to make sure it is still legally compliant
Make your policy available in other formats to those who need it
Engage the help of a legal professional if you’re unsure or want reassurance
Store your policy somewhere that’s easy for your employees to find it — like Charlie’s employee handbook!

Simplify the way you handle employee data with the right HR software

While many people focus on customer data when it comes to data protection issues, they also apply to employee data. And if you’re responsible for HR, you’re always handling personal data. This means that data security is another thing in that ever-growing list that falls under your role.

Luckily, it doesn’t have to weigh you down. With the right HR software, you can streamline all your HR operations (including managing employee data and sharing HR policies) and lighten your to-do list. Charlie can tackle all the heavy lifting with automation and clever processes, and you can take back your time to handle the tasks that call for a more personal touch.

We know what it’s like to run a small business, and we’ve designed Charlie with you in mind. And although we’re small, we also recognise the importance of information security and data compliance. That’s why we’re UK GDPR compliant, ISO 27001:2013 certified, and secure by design.

Data protection policies for small businesses, simplified

The world of data protection doesn’t have to feel intimidating. Use this guide to understand the basics of what you need to know, and put together a small business data protection policy that doesn’t feel overwhelming.

Use our free template to create your own policy, or go one step further and embrace a more effortless approach to HR with Charlie. Take a free trial today to explore how our platform can help you automate your HR tasks, so you can give your attention to where it’s needed the most.