Law FirmRisk Management

Do Law Firms need Cyber Liability Insurance?

By July 22, 2011 No Comments

Not every firm will secure this coverage but every firm should learn about the exposure and review the cost before making a decision…

 

The typical law firm maintains a significant amount of confidential information pertaining to clients and ongoing litigation. This includes both personal and corporate information. The potential harm to clients, as well as resulting legal liability, may be significant. To protect against this exposure insurance carriers have developed Network Security and Privacy Insurance for law firms.

  • Network Security & Privacy Insurance – Covers third party claims arising out of a breach of the insured’s Network Security or other private information. Includes coverage for both online and offline information, virus attacks, denial of service, and failure to prevent transmission of malicious code. Also extends coverage for defense costs and fines/penalties for violations of privacy regulations including but not limited to HIPAA, Red Flag Rules, and the new Hi-Tech Act.
  • Multimedia Insurance – Coverage for both online and offline media. Including claims alleging copyright/trademark infringement, libel/slander, advertising, false advertising, plagiarism, and personal injury.
  • Privacy Breach Responses Costs, Customer Notification Expenses and Customer Support and Credit Monitoring Expenses – Includes all reasonable legal, public relations, advertising, IT forensic, call center, credit monitoring and postage expenses incurred by the insured for a privacy breach response.
  • Network Asset Protection – Coverage for all reasonable and necessary sums required to recover and/or replace data that is compromised, damaged, lost, erased or corrupted.Coverage also includes business interruption and extra expense coverage for income loss as a result of the total or partial interruption of the insured’s computer system. Includes coverage for cyber terrorism.
  • Cyber Extortion– Will pay extortion expenses and extortion monies as a direct result of a credible cyber extortion threat.

The applications are very simple and can often be completed with a short phone survey.

Should firms be buying this coverage? Please comment with your thoughts.

Author Marcus Cusick

Marcus Cusick operates Guardian Brokers; a specialist insurance agency focused on providing risk management and insurance to professionals throughout the West. Marcus advises clients on improving practices, claim prevention, malpractice, ethics, and regulatory agency discipline.

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