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Category: Cyber Liability

Criminal Charges Highlight Law Firm Cyber Vulnerability

The recent criminal charges brought against three Chinese citizens for alleged hacks into law firm servers should be a warning to law firms that they are high-value targets for hackers.

The alleged hackers were charged with insider trading based on confidential corporate information obtained through the hacking of several U.S. law firms working on client mergers. As reported by Reuters, prosecutors say the hackers made more than $4 million by placing trades in at least five company stocks based on information from the breached law firm servers, including deals involving Intel Corp and Pitney Bowes Inc.


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Quantifying Your Cyber Risk

There was an excellent article in the October 5 Harvard Business Review on evaluating cyber risk. If your business is in the process of quantifying its cyber risks – and every business should be – the article “Can You Put a Dollar Amount on Your Company’s Cyber Risk?” is a must-read.

Highlights from the article are summarized below, but, first, keep in mind two major concepts when purchasing cyber insurance:

1)   Be careful what you tell your insurance company you’ll do to prevent data breaches as those promises can come back to bite you if those policies aren’t followed to the letter (and since so many breaches are linked to human error, they almost never are);

2)   Because cyber is such a new and evolving area of risk, and there is so little standardization among policies, there is room for negotiation when purchasing a cyber policy.

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Free Webinar on Negotiating a Cyber Insurance Policy

As data breaches continue to make nearly daily headlines, more businesses are considering purchasing cyber insurance to help protect them in the event of a breach or other kind of cyber event. 

But buying insurance is never easy, and the fact that cyber insurance is still a new product with little standardization among carriers makes it even more difficult to purchase.

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Data breaches covered by CGL?

Insurance policyholders may want to temper their reactions to yesterday’s decision by the United States Court of Appeals for the Fourth Circuit in Travelers Indemnity Co. of America v. Portal Healthcare Solutions LLC.

In its unpublished opinion, the Fourth Circuit affirmed a lower court ruling that Portal Healthcare’s data breach was covered under the company’s commercial general liability (CGL) policies. While the decision is significant, it’s worth highlighting an important fact: the policies at issue were issued in 2012 and 2013. More recent CGL policies may contain language purporting to exclude data breaches and other cyber events from traditional CGL coverage. An exclusion that surfaced in 2014, for example, precludes coverage for claims arising out of access to or disclosure of confidential or personal information.

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6 Quick Tips for Law Firms in the Market for Cyber Insurance

With the news that Russian hackers have been targeting U.S. and U.K. law firms as part of an insider trading scheme, it’s a good time to recirculate our tips for law firms looking to purchase cyber insurance.

As the Crain’s Chicago Business story noted, law firms “have largely trailed their clients in confronting the possibility of hackers accessing their networks for illegal profit,” even though they hold “vast repositories of confidential information.”

If your firm does not already have a cyber policy, it’s wise to consider purchasing one. Traditional law firm policies often exclude cyber risks, so you most likely won’t be able to rely on your existing policies to protect you in the event of a data breach or other cyber event.

Amy Stewart Law works with businesses, including law firms, at every step of the insurance process (from purchase and renewal, to filing insurance coverage claims and dispute resolution). Here are some tips if your firm is embarking on the cyber insurance-purchasing process:

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Third Circuit's Decision Gives FTC Bigger Byte!

In the first appellate case of its kind, the U.S. Court of Appeals for the Third Circuit released its opinion in Federal Trade Commission v. Wyndham Worldwide Corp., No. 14-3514, Aug. 24, 2015 (slip op.), holding that the FTC has the authority to assert watchdog claims against private companies under the “unfairness” provision of the Federal Trade Commission Act for failure to implement cybersecurity safeguards, resulting in a data breach.

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The Worst Case Scenario

Recently, Lloyd’s of London and the University of Cambridge co-authored a report forecasting that a major cyberattack on the East Coast of the U.S. could result in $70 billion in claims, stressing potentially gaping deficiencies in both traditional and cyber policies to respond to such an event.

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Amy Elizabeth Stewart presents Cyber Webcast July 22nd

Cyber Insurance  ::  The Future is Now Webcast

From nearly 20 million security incidents detected in 2011 to more than 40 million in 2014, cyber breaches are dominating headlines.  As corporate America attempts to stay ahead of its cyber exposures, the insurance industry is scrambling to create solutions to meet the risk-transfer demand.

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Tips for Buying Corporate Cyber Insurance

After cyber breaches have dominated the headlines for more than a year (e.g., Target, Sony), experts now say there are two types of businesses in today’s world –  those who know they have been hacked, and those who have not yet discovered the breach.

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What Cyber Insurance Lessons Did We Learn from Sony-Zurich?

Sony and Zurich recently reached a settlement in an insurance coverage dispute over the April 2011 hacking of Sony’s PlayStation network, resulting in the release of personal information of over 77 million user accounts. At the time, it was the largest data security breach in history, costing Sony roughly $178 million in lost profits.

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Could Poor Cyber Risk Management Void Your Cyber Coverage?

We recently predicted cyber insurers would attempt to avoid coverage on grounds the insured failed to implement appropriate security protocols. Regrettably for policyholders, that prediction is already becoming a reality.

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Cyber Insurers Draw First Blood

Last week produced one of the first published cases interpreting a cyber insurance policy—in Travelers Prop. Cas. Co. of Am. v. Federal Recovery Services, Inc., No. 14-170 (D. Utah). Granting Travelers’ motion for partial summary judgment, the district court on May 11 decided the cyber policy was not triggered and the insurer had no duty to defend its insured.

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Amy Stewart Profiled in Texas Super Lawyers

Amy Stewart was profiled in the just-published issue of Texas Super Lawyers. Here's a snippet:
Amy Elizabeth Stewart is a self-proclaimed nerd. She is currently talking about scrutinizing an insurance policy dealing with an evolving coverage area that includes computer hacking.

'It’s cyber, which I really love. It’s new. I love getting to see the policies and compare them – they’re not standardized,' she says. 'And I just got giddy. It was embarrassing.'

Her reaction may seem extreme to those of us who view policy language with the excitement usually reserved for actuarial tables or tax code, but it shows how well-suited she is to her area of practice.

'It’s just hashtag: nerd alert,' she says. 'I enjoy the analysis. I enjoy the problem-solving. And I enjoy the advocacy.'

Click here to see the full text of "She's Got You Covered."

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Amy Stewart Presents ‘Insurance 101’ to DBA Corporate Counsel Section

Amy Elizabeth Stewart, of Dallas’ Amy Stewart PC, will present “Insurance 101: Fundamentals of Liability Insurance for In-House Counsel” to the Dallas Bar Asociation’s Corporate Counsel Section on Tuesday, Nov. 6 at noon at the Belo Mansion, 2101 Ross Ave. The one-hour presentation provides one hour of MCLE credit. There is no charge for DBA members, although there is a lunch buffet available for purchase. Non-members must pay a fee in order to receive MCLE credit. For more info ...

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Healthcare Organizations Face Significant Cyber Risks in 2012

Healthcare providers today are turning to technology to improve the efficiency of their practices—from collecting and monitoring patient data in a digital environment to managing the information avalanche confronting modern practitioners seeking to provide state-of-the art care. Known data breaches affecting the healthcare industry suggest that privacy policies may not be keeping pace with the cyber risks of the new technology.  Based on survey response ...

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Please visit our web site at www.amystewartlaw.com.
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Amy Stewart Law is a boutique law firm that represents policyholders in insurance coverage litigation and bad faith, with an emphasis in directors & officers liability, cyber insurance, fiduciary liability, professional liability and other specialty liability coverages.


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  • insurance coverage litigation
  • bad faith litigation
  • policy interpretation & analysis
  • insurance review & planning advice
  • advice | insurance disputes
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