# Data Classification & Handling Policy

**Purpose.** Defines the sensitivity tiers your data falls into and the handling rules for each — including the rules that decide what may be pasted into an AI tool.

**When to use it.** Early. Classification underpins access control, AI input rules, and most security decisions. Review annually.

**How to use it.** Use four tiers at most; every tier beyond that is one people will not remember. The AI handling row in section 2 is the part staff will actually look up — make sure it names specific approved tools, not a category.

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### 1. Classification tiers

| Tier | Definition | Examples | Impact if disclosed |
|---|---|---|---|
| **Public** | Approved for public release. | Published marketing, annual report | None |
| **Internal** | Routine business data. | Internal comms, non-sensitive analytics | Minor |
| **Confidential** | Sensitive business or personal data. | Customer records, employee data, contracts | Significant |
| **Restricted** | Most sensitive; severe impact. | Special category data, credentials, M&A, security detail | Severe |

### 2. Handling rules

| Control | Public | Internal | Confidential | Restricted |
|---|---|---|---|---|
| Storage | Any approved | Approved systems | Approved + access control | Approved + encryption + logging |
| Access | Open | All staff | Role-based, owner-approved | Named individuals, owner-approved |
| Sharing externally | Free | NDA | Contract + DPA | Owner + Legal approval |
| Email | Permitted | Permitted | Encrypted | Not permitted — secure transfer only |
| **AI tool input** | **Permitted** | **Approved tools only** | **Approved enterprise tools with no-training guarantee** | **Prohibited unless explicitly approved for that system** |
| Retention | Per schedule | Per schedule | Per schedule + review | Per schedule + documented review |
| Disposal | Standard | Standard | Verified | Verified + certificate |

> **The AI row is the one that gets breached**
> Staff paste customer data into public chatbots because it is convenient
> and the rule was not to hand. Publish this row separately, name the
> approved tools, and put it where people work.

### 3. Applying a classification

1. The Data Owner assigns the classification at creation or acquisition.
2. Where a dataset holds mixed tiers, **the highest tier applies to the whole
   set** unless it is separated.
3. Classification is recorded in the Data Asset Register.
4. Derived data — including model outputs and embeddings — inherits the
   classification of its most sensitive input unless a documented assessment
   lowers it.

> **Derived data inherits**
> Embeddings and model outputs derived from Confidential data are
> Confidential. This is routinely missed, and it is how sensitive data ends
> up in an unprotected vector store.

### 4. Special category & regulated data

Special category personal data, criminal offence data, children's data, and
payment card data carry additional requirements — see
Processing & DPIA Log. Default these to **Restricted** unless assessed
otherwise.

### 5. Labelling

Where the platform supports it, apply the label in the tool. Where it does
not, record classification in the register. **[Specify your labelling
mechanism.]**

### 6. Review

| Version | Date | Owner | Approved by |
|---|---|---|---|
| 0.1 | [date] | [role] | [committee] |

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## Adaptation notes

- **Small organisations:** Three tiers — Public, Internal, Confidential — is usually enough. Keep the AI input row regardless; it is the highest-value line in the policy.
- **Existing security classification:** Do not create a competing scheme. Map onto what security already uses and add only the AI handling row.
- **Public sector:** Align to your national scheme (e.g. OFFICIAL / SECRET) rather than these labels, and add the FOI disclosure consideration to each tier.

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*From the [Open Data & AI Governance Kit](https://lsdeva.github.io/governance-kit/). Licensed [CC BY 4.0](https://creativecommons.org/licenses/by/4.0/) — free to use, adapt, and share with attribution.*

***Not legal advice.** Adapt to your jurisdiction, sector, and risk appetite, and have qualified counsel review anything material.*