Legal Developments and Risk Management Tips Impacting the Professional Liability Community.
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.
All professionals utilize computers in the workplace. These devices are a must for providing professional services, meeting customer needs, marketing, billing functions and countless other tools available to professionals through the use of computer equipment. Make no mistake, however, the very equipment that is so crucial to your business is under cyber-attack and is constantly at risk of a virus or hack. Yet, inexplicably, 25% of all computers worldwide are not adequately protected. Professionals cannot afford to be a victim of cyber-liability.
In June 2012, the popular social networking website LinkedIn was hacked resulting in approximately 6.4 million passwords stolen from the website. Within hours of the incident, the passwords were posted on the internet and were used to direct traffic to fraudulent websites. The massive security breach also resulted in a class action lawsuit against “the world’s largest professional network” in the Northern District of California. The plaintiff class alleged that LinkedIn failed to adequately and properly secure the personal information stored on its website. This is the classic example of cyber-liability exposure.
The fact pattern sounds like it was ripped from the pages of a Hollywood screenplay. Two criminals back a trailer to a pharmaceutical warehouse and cut a hole in the ceiling of the facility. They proceed to utilize the company’s own forklifts to load over $80 million in prescription drugs into the trailer and exit without detection on any security cameras. All told, authorities estimate that the heist represents the largest known theft of prescription drugs in US history. The last scene in this bizarre, real world thriller takes place in the Federal District Court of Connecticut where the parties are fighting the first cyber liability suit of its kind with major implications on the fiduciary responsibilities of data storage and security companies.