By Michael Kelley With all of the data breach issues in the news, we thought that this decision might be of interest to you. The Connecticut Supreme Court, [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance ], has affirmed a lower court ruling denying coverage to IBM for more than $6 million in losses stemming from data lost in a highway incident. The Court ruled that two insurers...

Not a day goes by it seems without news of a cyber attack resulting in the release of 4 trillion people’s personal information. It has gotten to the point where one’s identity could seemingly be stolen several times a month. Perhaps the solution for identify theft is to simply wait for your fake identity to be stolen. Clearly not all data breaches -- and probably most do not -- cause any identifiable or quantifiable...

By Dennis Cusack Insurance policies covering data breach liability began appearing roughly ten years ago. We noted then a troublesome provision in some forms that seemed to exclude coverage for the insured’s failure to maintain data security – in other words, the very risk the insured was seeking to insure. We’ll call it the “Mistake Exclusion.” One AIG form from 2006, for example,...

The mid-March settlement by Target, of the numerous data breach class actions filed against the retailer, following disclosure of millions of its customers’ debit and credit card numbers, will cost the company about $25 million. I had the privilege of publishing an Op-ed concerning the settlement in Minneapolis’s Star Tribune . Target is headquartered in Minneapolis so it was neat to share my views with so...

Now that I have your attention -- given how popular cyber coverage issues are these days -- the recent Pennsylvania trial court decision in Penn-America Ins. Co. v. Toni Tomei t/a Sunkissed Tanning & Spa, No. 3917 of 2012 (Pa. Ct. Comm. Pl., Westmoreland Cty. Feb. 19, 2015) is worthy of discussion. On its face, the case has nothing to do with cyber coverage. But, in fact, it does. At issue in Sunkissed Tanning...

By Douglas M. Palais , Attorney, Vandeventer Black LLP This question cannot be answered definitively at this time, but should be considered carefully by all insurance professionals. Typical CGL policies exclude acts of terrorism and acts of war. In the past, it was relatively easy to define "war" as hostile military actions by nation states. But today, hostile actions – military and cyber in nature...

This new LexisNexis publication, written by attorneys Carrie E. Cope, Dirk E. Elhers, and Keith W. Mandell, provides practical analysis and legal guidance for using social media in business. An essential publication, Social Media and Insurance: The Insider's Guide to Successful Risk Assessment and Management , focuses on the topics that matter, providing unique and indispensable guidance to all in the insurance...

“ Breaking Bad” in Cyberspace: a Challenge for the Insurance Industry by Carrie E. Cope and Ian Reynolds of Schuyler, Roche & Crisham, PC points out that anyone who may have thought that potential risks from communications, and other activities, in cyber space have been exaggerated, or are too remote to raise significant concerns for their business or clients, should have certainly received a strident...

By Michael R. Kelley . According to FBI Director Robert Mueller, "there are only two types of companies: those that have been hacked and those that will be…." Computer hackers stealing our personal information (social security numbers, bank accounts, addresses and phone numbers, etc.) are all over the news. By all means, let's increase our network security. But, insurance can play a vital role...

Lately the coverage world has been abuzz over the New York trial court’s decision in Zurich American Ins. Co. v. Sony Corp. of America -- the first decision to address in earnest whether a commercial general liability policy provides coverage for the loss of a company’s customers’ personally identifiable information on account of a hacking incident. Not since the Betamax has anything involving Sony generated...

By Tyler Gerking It’s official—cybersecurity is now a top-ranked risk at the board level, according to the “ Lloyds Risk Index 2013 .” This should make digital risk a focus of senior corporate management. Those managing corporate risk should leverage the emerging cyber insurance market, which is rapidly growing and evolving. But they should do so methodically, after gaining an understanding...

So far the focus of the Target data breach has been on its scope, how it may have happened, Target’s response and the various types of financial havoc that it could cause for the nation’s second largest retailer. But no doubt it won’t be long before insurance coverage becomes a front and center issue. It would be hard to imagine insurance coverage not having a place at the table for such large scale...

As discussed in the Late-r Notice column in the last issue of Coverage Opinions , there has been much chatter of late about insurance for losses that a business sustains from cyber liability – especially data breaches. Think of a computer network that has been hacked or somehow failed, with the result being customers’ personal information, which should have been confidential (credit card, medical, social security...

By Kevin M. LaCroix, Esq., Executive Vice President, OakBridge Insurance Services Smaller companies increasingly are the subject of data breaches and those smaller companies "are the number-one target of cyber-espionage attackers," according to a recent study detailed in a April 24, 2013 CFO.com article entitled "Should You Consider Cyber Insurance?" ( here ). Smaller companies increasingly are...

By Amanda Hairston, Senior Associate, Farella Braun + Martel LLP Many insurers are now offering "cyber liability" or "cyber risk" policies designed to protect policyholders against electronic injuries that policyholders may either suffer themselves or cause to others. Most of these policies focus on protecting policyholders in the event of a data breach. According to a recent report, the finance...

By Rene Siemens and David Beck , Attorneys, Pillsbury Winthrop Shaw Pittman LLP This article previously appeared in Risk Management magazine. Exposure to network and data security breaches has grown exponentially in recent years and the market for insurance tailored to cover this risk has grown just as fast. These insurance policies are sold under names like "cyber insurance," "privacy breach...

With social media pervading most aspects of society and business, are you up to date on the changes that it brings to the insurance industry? Download a complimentary white paper covering insurance implications of social media . Social media presents a whole new set of exposures and liabilities that can cause significant damage to a company. The majority of potential liabilities that companies face from social media...

Get up to date on social media’s influence for insurance privacy laws and regulatory changes. Cl ick to see Ronald Raether's video message about this webinar . R egister now Le xi sNexis® Presents a Complimentary CLE-Accredited* Webina r The 2013 Traffic Jam: The Intersection of Social Media, Privacy...

By Tyler Gerking, Partner, Farella Braun + Martel LLP In August, the U.S. Court of Appeals for the Sixth Circuit ruled that there was coverage for first-party and third-party losses arising from the theft of customer credit card information by hackers under a crime policy's computer fraud endorsement. See DSW Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa., Case No. 10-4576/5608 (Aug. 23, 2012) . The...

By Rene Siemens and David Beck , Attorneys, Pillsbury Winthrop Shaw Pittman LLP This commentary observes that the rising threat of cyber attacks and data breaches as well as the proliferation of data security and privacy laws have made it more important than ever for organizations that handle sensitive information to insure against data security and privacy losses. The article further points out the most common cause...

By Lon Berk, Partner, Hunton & Williams In his article, "CBI for the Cloud," appearing in the Nov./Dec. 2011 issue of Coverage, Lon Berk of Hunton & Williams observes that the frequency of business cloud computing is expected to increase. The article describes cloud computing and its many advantages to businesses as well as its potential disadvantages. A significant risk is business interruption...

By Rene Siemens and David Beck , Attorneys, Pillsbury Winthrop Shaw Pittman LLP If you thought you did not need cyber insurance before, Uncle Sam may cause you to think otherwise. On October 13, 2011, the Securities and Exchange Commission ("SEC") Division of Corporation Finance issued guidance on disclosure obligations relating to cyber security risks and incidents . The guidance, which is based on existing...

By Louis A. Chiafullo and Brett D. Kahn, Attorneys, McCarter & English, LLP In their article appearing in the May/June 2011 issue of Coverage , "Coverage for Cyber Risks," Louis Chiafullo and Brett Kahn first observe that the costs arising from data breaches are escalating exponentially. This can be particularly problematic for corporations as individuals (sometimes in class action suits), shareholders...

By Scott Godes, Counsel, Dickstein Shapiro LLP It seems that 2011 has been the year of cyberattacks - denial of service attacks, data breaches, and more. Would your insurance policies cover those events? Beyond the denial of service attacks that made news headlines, a shocking "80 percent of respondents" in a survey of "200 IT security execs" "have faced large scale denial of service attacks...

The insurance world is, as many practitioners already know, shaped and molded by the development of both new business practices and new technologies. The growth of emerging industries often comes accompanied by new risks and liabilities, which in turn give rise to new insurance products and eventually, insurance coverage litigation. The loop becomes complete when new insurance products and coverage cause businesses to...