Cyber-Liability

Category: Cyber-Liability

Cyber Liability in the C-Suite

Everything is electronic. Companies are increasingly reliant on electronic processes to obtain and store valuable customer data, confidential, privileged and proprietary information. With that increased reliance comes the increased risk that this information can be compromised. In light of many recent high-profile data breaches, litigation surrounding data and privacy protection is increasing. A side effect of this litigation is the attention now paid to the role of boards of directors in managing and responding to cyber liability risks. Boards concerned about potential liability of its officers and directors can look to two recent sources for guidance on this issue.

September 10, 2014 • Cyber-Liability, Professional Liability Matters, Technology

Cyber Lessons from Jennifer Lawrence

As you’ve no doubt heard, hackers recently accessed dozens of female celebrities’ personal cloud-based storage accounts, releasing hundreds of nude photographs and videos onto the web. Many of the photographs were taken by cell phones, which automatically backed up the files to popular cloud services, such as iCloud and Dropbox. Some suspect that the hackers then employed targeted attacks in which “brute force” programs were used to randomly guess weak passwords for a given username until it found a match. Once inside the celebrities’ cloud accounts, the hackers could access all manner of personal information. This is how many criminals operate today and all professionals should pay attention.

May 29, 2014 • Cyber-Liability, Professional Liability Matters

The Target Data Breach Litigation Begins

In November 2013, in the midst of the holiday shopping season, hackers targeted Target Corporation with one of the largest security breaches of its kind. The hackers installed malware on the company’s security and payment systems to steal credit card information. The result impacted over 100 million customers. Given the magnitude of the breach, it may be surprising to learn that Target had prepared for an attack. It invested over $1.5 million in malware detection software in 2013 alone and hired a leading security firm to monitor for suspicious activity and alert the company in the event of a breach. Obviously, that wasn’t enough, according to a wave of recent lawsuits.

April 2, 2014 • Cyber-Liability, Professional Liability Matters

Cy-“Burned” – The New Importance of Cyber Insurance

Data breaches that result in the unwanted dissemination of personal information are prevalent in the news of late, particularly given the rapid growth of electronically stored information and online commerce. A data breach can be very, very expensive even for the smallest of companies. On average, a relatively small breach that involves less than 10,000 records reportedly costs about $2.4 million in out-of-pocket expenses, $3 million in lost revenue, and no small amount of lost client confidence. Despite this risk, another recent study found that only 35% of small businesses invest in cyber insurance. This should be a major concern for all businesses and employers given that many standard policies exclude coverage for cyber losses.

March 26, 2014 • Cyber-Liability, Legal Malpractice, Professional Liability Matters

Insider Trading at Law Firms? You Bet.

Law firms house a treasure trove of sensitive documents, confidential information, trade secrets and other materials of immeasurable value. Most professionals are aware of these risks and take steps to safeguard cyber and hard copy materials. Yet, the frightening ease with which materials land in the wrong hands was made public recently when a stock broker and a law firm employee were arrested on charges of fraud in connection with a $33 million insider trading scheme.

January 2, 2014 • Cyber-Liability, Professional Liability Matters

Cybercrime Strikes Target Corp

Target Corporation, the nation’s number two general retailer (after Wal-Mart), was recently the center of a cybercrime attack that may have compromised as many as 40 million credit and debit card accounts. Target revealed that a third-party had breached its security safeguards during the height of the holiday shopping season and gained access to private customer data, including shoppers’ names, credit card numbers, expiration dates, and three-digit security codes. This highly publicized debacle highlights the risks of cyber exposure.

August 13, 2013 • Cyber-Liability, Professional Liability Matters

Time to Revisit your Password

It is time to revisit your password because it may be susceptible to an easy hack. The risk of cyber loss is well documented. We’ve routinely warned of these risks previously and, no doubt, will continue to do so because cyber losses are reportedly increasing, and the cost to recover from a data breach can be staggering. All professionals maintain personally identifiable data that would be a goldmine to hackers. Most professionals – hopefully all – at the very least utilize the most fundamental type of security by storing electronic data in a password protected format. But, according to a recent survey, that password may need an update.

August 6, 2013 • Cyber-Liability, Professional Liability Matters

Love Triangles and Liability: Walgreens hit with $1.4 Million Verdict

Walgreens pharmacy was recently hit with a $1.4 million verdict for divulging sensitive patron information. The suit arises from one of the more peculiar set of facts you’ll encounter but the takeaway is important to all. Pharmacy chains have increasingly become the targets of lawsuits mostly stemming from the improper administration of prescriptions or the failure to give appropriate warnings. But some recent suits involve a dilemma that all professionals face in this digital age: the failure to adequately protect sensitive and confidential data.

June 6, 2013 • Cyber-Liability, Professional Liability Matters

Cyber-liability: An International Problem

Legislation was recently introduced in the Australian parliament that would require companies to publicly disclose data security breaches. The legislation is intended to protect the public by ensuring they are promptly notified if their personal data is compromised. Under the proposed legislation, an administrative agency in Australia would be empowered to levy fines of up to $1.7 million on companies that fail to comply with the disclosure requirements. Clearly, cyber-liability is an international problem.

May 16, 2013 • Cyber-Liability, Professional Liability Matters

Arrests Follow Massive, International Cyber-Heist

Recent arrests followed one of the more complex cyber attacks in history. $45 million was reportedly stolen in the blink of an eye but it may take years to comb through the unprecedented cyber-liability issues. Two major banks are now evaluating novel liability issues and presumably deciding whether to lodge a series of lawsuits with major implications on the landscape of cyber-liability.