Most consumers know all too well about the loss that can occur when private data falls into the wrong hands - a risk that has progressively increased in our digital world, where vast amounts of information is stored on our computers and passed back and forth electronically. For businesses, the repercussions of compromised data can be even more devastating.

Right now, when consumer data breaches are at a record high, accountability is a key issue.

A new law in Nevada, U.S. went into effect in the beginning of October, requiring that businesses in the state encrypt electronic transmissions of "personal information" to protect the security of consumers? confidential data.

Nevada is the first state in the U.S. to enact such a law. Will others follow Nevadas example? This particular law may not be directly modeled, at least not without some initial fine-tuning - the law has taken some flack over its vague scope. In the law, there is no specification as to whether the requirement applies only to businesses headquartered in Nevada, or to businesses outside of the state that communicate with Nevada residents; it does not define what falls under "electronic submissions"; it fails to include any penalty provisions for failure to comply, meaning courts could interpret the law broadly with varying outcomes.

Yet, this may well be an important indication of what types of legislation we'll see more of in the future. And, at any rate, it's a good reminder to us all of the importance of protecting personal information, and the steps that can be taken - by both consumers and businesses - to safeguard sensitive data.

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