Information classification is the practice of assigning data a sensitivity level so the organization can apply protections that match thebusiness impactif the information is exposed, altered, or becomes unavailable. The core driver for classification is therisk of harm—especially harm caused by unauthorized disclosure. If disclosure would result in regulatory penalties, reputational damage, competitive disadvantage, contractual breach, or harm to customers and employees, the data is classified at a higher level and requires stronger controls. These controls commonly include tighter access restrictions (least privilege and role-based access), stronger authentication, encryption at rest and in transit, stricter handling and sharing rules, audit logging, monitoring, and secure disposal requirements.

While retention can be influenced by compliance obligations, it is not what determines the classification level; retention policies typically reference classification but do not define it. “Need for access” is managed through access control decisions, which are appliedafterthe data’s sensitivity is understood; classification informs who should have access, not the other way around. “Timing of availability” relates to availability requirements and service resilience, which are important, but classification schemes primarily focus on sensitivity and potential damage from inappropriate exposure, with integrity and availability considerations often handled as additional impact dimensions.

Therefore, the best verified basis for information classification is the organization’s assessment ofrisk of loss or harm from disclosure.