Why use sensitivity labels?

As we mentioned in the previous section of the governance handbook, sensitivity labels are a cornerstone of an organization’s digital security system. They ensure that Microsoft 365 workspaces, such as Teams, SharePoint sites, and groups, are classified and protected according to their sensitivity.

Here are some of the things sensitivity labels can help you to do:

• Identify and classify sensitive data across your organization so you can build M365 governance policies on top of it,
  
• Protect your data from unauthorized copying, printing, or sharing (both internally and externally),
  
• Ensure that your data is handled and stored in compliance with your organization’s policies and regulations,
  
• Communicate the level of confidentiality and sensitivity of your data to your users and collaborators so they understand better how to handle it,
  
• Reduce the risk of data breaches, leaks, or losses by protecting your workspaces and data, preventing unauthorized access, and ensuring the information remains secure.

Think of your Microsoft 365 workspaces as different rooms in a corporate office. Some rooms, like the breakroom, are open to everyone, while others, like HR or Finance, should only be accessible to specific employees. Without proper labeling, you risk accidental data exposure.

For example, if a Microsoft Team discussing a confidential acquisition isn’t labeled correctly, an intern or an external guest might gain access unintentionally, leading to potential data leaks.