The cloud is everywhere, raining down apps and digital services on companies. The potential benefits are clear: more storage and portability of company information and customer data, as well as time and cost savings for management and employees. In a 2013 study from the Ponemon Institute and Thales e-Security, more than half of respondents said they put sensitive or confidential data in the cloud.

But do businesses that use the cloud know if important data is safe up there? Companies can take several steps to make sure they are protecting confidential data—and minimizing liability—in the event of a cloud-based data breach.