Cyber Security Liability – also known as Privacy Protection

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These days there is news practically every day of a new breach or “hack” of some of the world’s largest companies and even government agencies. Law firms and other professionals seldom make cyber news headlines, but face a dramatically larger legal exposure than a retail store in the event of an attack. Corporate intellectual property law firms in particular will have sensitive client information that could be the target of purposeful attacks by the clients’ competitors, but all firms have sensitive employee data, and many law firms now accept payments online.

First Party coverages include Loss of Digital Assets, Non-Physical Business Interruption and Extra Expense, Cyber Extortion, Cyber Terrorism, and Security Event Costs. Third Party protection includes Network Security and Privacy Liability, Employee Privacy Liability, and Electronic Media Liability.

Crime and Fidelity Coverages

While D&O and Cyber policies may offer some crime coverages, most law firms should consider employee theft coverage, especially if large balances are maintained in escrow or trust accounts. D&O policies can also include Fiduciary Liability for pensions and employee benefit plans. Care must be taken regarding shared aggregates.