How to use Microsoft 365 Encryption

How to Use Microsoft 365 Encryption

Email is still one of the most common ways businesses share sensitive information. Quotes, contracts, payroll documents, HR issues, legal information, client data and financial details are all regularly sent over email.

The problem is that email was not originally designed with modern security threats in mind. Once a message leaves your inbox, you often lose control over where it goes, who forwards it, and whether the wrong person could gain access to it.

That is where Microsoft 365 encryption can help.

Microsoft 365 includes tools that allow businesses to protect emails and documents so that only the intended recipients can access them. Used correctly, encryption can reduce the risk of data breaches, accidental sharing and confidential information being exposed.

What is Microsoft 365 encryption?

Microsoft 365 encryption is designed to protect sensitive emails and files by limiting who can open, forward, copy or print them.

Rather than simply relying on trust, encryption adds a layer of control. For example, you can send an email that only the recipient can read, or prevent the recipient from forwarding it on to someone else.

This is especially useful when sending information such as:

Client records
Financial information
Employee data
Contracts and legal documents
Passwords or account details
Business plans
Sensitive internal discussions

Encryption does not replace good cyber security, but it is an important part of protecting business data.

When should you use encrypted email?

Not every email needs to be encrypted. Sending a quick message to confirm a meeting time probably does not require it.

However, encryption should be considered whenever the information could cause damage, embarrassment, financial loss or a compliance issue if it was sent to the wrong person.

A simple rule is this:

If you would not want the email printed out and left in a coffee shop, you should consider encrypting it.

How to send an encrypted email in Outlook

For many Microsoft 365 users, sending an encrypted email is straightforward.

When writing a new email in Outlook:

Create a new email as normal.
Select Options.
Choose Encrypt.
Select the protection option you need.
Finish your email and send it.

Depending on how your Microsoft 365 tenant is configured, you may see options such as Encrypt or Do Not Forward.

What is the difference between Encrypt and Do Not Forward?

The wording can be confusing, but the difference is important.

Encrypt protects the message so that only authorised recipients can open it. This helps prevent the contents of the email from being read by someone who should not have access.

Do Not Forward goes a step further. It helps stop the recipient from forwarding the email to someone else. It may also restrict actions such as copying or printing, depending on the settings and recipient environment.

For most businesses, Do Not Forward is useful when sending highly sensitive information, such as HR documents, legal correspondence, commercial proposals or confidential client data.

What are sensitivity labels?

Microsoft 365 can also use sensitivity labels through Microsoft Purview.

Sensitivity labels allow your business to classify information, such as:

Public
Internal
Confidential
Highly Confidential

These labels can then apply protection automatically. For example, a document marked as Confidential could be encrypted so that only people inside your organisation can open it.

This is particularly useful because it gives users a simple way to protect information without needing to understand all the technical settings behind the scenes.

Can encryption protect documents as well as emails?

Yes. Microsoft 365 encryption is not only about email.

Sensitivity labels can be applied to Word documents, Excel spreadsheets, PowerPoint files and other Microsoft 365 content. This means a confidential file can remain protected even after it has been downloaded, emailed or stored in another location.

This is a big advantage over basic file permissions. Traditional permissions often protect the location where a file is stored. Encryption can protect the file itself.

Common mistakes businesses make with encryption

One of the biggest mistakes is assuming Microsoft 365 encryption is automatically set up correctly for every business.

Microsoft 365 includes powerful security tools, but they still need to be configured properly. Without the right setup, staff may not see the correct encryption options, sensitivity labels may not be published, and important information may still be shared without protection.

Other common mistakes include:

Not training staff on when to use encryption
Sending sensitive information without protection
Using personal email accounts to share business documents
Assuming password-protected attachments are enough
Not reviewing Microsoft 365 security settings regularly
Giving too many users access to confidential files

Encryption works best when it is part of a wider security strategy.

Is Microsoft 365 encryption enough on its own?

No. Encryption is important, but it is only one layer of protection.

A strong Microsoft 365 security setup should also include:

Multi-factor authentication
Conditional access policies
Secure password policies
Email filtering and anti-phishing protection
Data loss prevention
Device management
Backup
User awareness training
Regular security reviews

Encryption protects sensitive information, but it will not stop every cyber threat. For example, if a user’s account is compromised, an attacker may still be able to access information that user is allowed to see.

This is why Microsoft 365 security should be reviewed as a complete system, not as a single feature.

Why Microsoft 365 encryption matters for small businesses

Small businesses often assume they are too small to be targeted. Unfortunately, cyber criminals often see smaller organisations as easier targets because they may not have the same security controls as larger companies.

If your business handles client data, employee records, contracts, financial details or commercially sensitive information, encryption should be part of your everyday security approach.

It can help reduce risk, improve professionalism and demonstrate that your business takes data protection seriously.

How Hamilton Group can help

At Hamilton Group, we help businesses get the most from Microsoft 365 while keeping their data secure.

We can review your current Microsoft 365 setup, check whether encryption and sensitivity labels are configured correctly, and help your team understand when and how to use them.

Our Microsoft 365 security services can help with:

Microsoft 365 security reviews
Email encryption setup
Sensitivity labels
Conditional access
Multi-factor authentication
Secure file sharing
Cyber Essentials readiness
Staff cyber security awareness

Microsoft 365 is a powerful platform, but it needs to be configured correctly to properly protect your business.

If you are unsure whether your Microsoft 365 environment is secure, Hamilton Group can help you review it, improve it and make sure your business is better protected.

Call us on 01423 438953 or book an appointment with one of our experts.