Law firms need to consider and assess the risks associated with a potential data breach as part of their overarching firm risk management policies. Most readers probably are aware that their professional liability insurance policy does not provide coverage for most cyber claims, including claims where a law firm suffers damage as a result of unauthorized interference due to cyber-attack, computer melt-down due to viruses, theft, or hacking of electronic equipment or data. More information on this topic can be found in our Fall 2012 Loss Prevention Bulletin piece, Your Professional Liability Insurance and Cyber Coverage.
Coverage is available through various providers, as noted by Tim Lemieux in his recent post, Cyber risk insurance options – Do you have the coverage you need?:
The evolution of the cyber insurance policy has made significant strides in recent years. The most common element of coverage found within cyber and privacy liability policies is for claims brought against you arising as a result of a breach. This would include legal defence costs and indemnity payments, and is provided on an “all risks basis.” Some current extensions of coverage include protection against the spread of computer viruses, or in the event that your systems are used to hack a third party. Many policies have been extended to include first-party costs to comply with breach notification laws in different jurisdictions. Finally, cover can also be included for voluntary security breach notification which will help mitigate an impact upon the company’s brand or reputation.
Coverage has also evolved to take into consideration the outsourcing of data storage to third-party cloud providers. While this endorsed coverage is still in its infancy, there are some insurers that are able to consider this type of risk.
If you’re not certain you’ve got the right coverage, contact your insurer for more information.
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