A data security system and method protects stored data from unauthorized access. According to one aspect of the invention, a client computing device communicates periodically with a server. If communications is note established between the client and the server for a selected activation interval and a subsequent grace period, the data is determined to be lost, and programmed security rules are automatically executed. Rules relating to encryption, as well as other security procedures, can be defined and entered by an administrator with access to the server, and then disseminated to each of a plurality of clients that access the server.