Blog
← Back to All

Not Having Cyber Liability Insurance: The Real Risk Your Law Firm Takes

Mar. 14, 2016

When it comes to the possibility of a breach of confidential information, proactive versus reactive is extremely important. Experts recommend the latest firewall protection, essential password - user identity protocols, and encryption for remote devices accessing and transmitting confidential information. An ABA Journal article strongly recommends that law firms take the additional step of purchasing cyber liability insurance, which adds another layer of financial protection in case of a breach. A Cyber Liability Insurer will provide you with the resources to help you identify and address network and system vulnerabilities.

The bottom line...Law firms have an ethical and legal obligation to protect the confidential digital information that they routinely access and store.

Types of Data at Risk of Breach

A leader in professional liability insurance for law firms, CNA, quoted the security consulting firm Mandiant, saying that 80 percent of the largest 100 law firms in the United States reported a malicious computer breach. In a majority of the cases, the law firm did not discover the breach on its own, or had uncovered the incident several months after its occurrence. Firm size and legal specialty aside, if you take a quick inventory of client and firm-business information right this minute, your law firm will have some or a combination of the following data:

Sources of Cyber Breaches

Baker & Hostetler, a major cyber liability defense law firm with offices located across the U.S. reported that human error accounted for most of the security breach incidents handled by the firm in 2014. Employee negligence topped the list with 36 percent of the cases. Examples of internal errors cited include:

The Benefits of Cyber Liability Insurance

Professional Liability Insurance Policies typically do not have enough coverage in the event of a confidential client information breach or a network hack. A stand-alone cyber liability insurance  policy is preferred in that it provides a separate limit of liability. This safeguards against depletion of the firm’s professional liability policy limit. The policy should meet the policyholder’s specific needs and cover any gaps in the existing professional liability insurance coverage. Investing in a stand-alone cyber liability insurance policy ensures that you have immediate access to breach response experts to provide you the assistance you need in the event of a security breach. Other benefits of a cyber liability insurance coverage include:

Takeaway

There are numerous ways for a breach or data theft to occur. Failure to protect sensitive data puts you at risk for litigation, regulatory penalties, damaged reputation, loss of business, and other repercussions. Cyber liability insurance helps you manage the financial risk.  It is critical to work with an experienced broker who can help you identify your risk and customize a cyber liability insurance policy to meet your specific needs.

Author

Cindy Wiedman, LiabilityPro Insurance Advisors, President

Cindy Wiedman, founded Wiedman Insurance Services, LLC (LiabilityPro Insurance Advisors*) August 1, 2014. Cindy is a Registered Professional Liability Underwriter (RPLU) and has designed and administered professional liability insurance programs over a 35-year career working for various insurance administrators in the Midwest such as Shand Morahan & Company, Kirke Van Orsdel, Marsh and Lockton Affinity.

*Currently working with investment advisory businesses domiciled in Iowa, Minnesota, Kansas, Illinois and Nebraska.

Subscribe to Our Monthly Newsletter and Receive the Below eBook for Free!
Thank you for Subscribing to the LiabilityPro Insurance Insider!

You’ll now receive instant monthly access to amazing free tips and resources like:

• Free and paid CLE opportunities
• Cutting premium costs
• Effectively managing your insurance
• Relevant industry articles
• And more!

Here's your free download to:  Cyber Security Threats and the Practice of Law: Understand Threats, Prevent Losses, and Learn Requirements
An error occurred while submitting the form. Please contact hello@liabilityproinsurance.com for direct assistance.
Also read, “6 Keys to Understand and Take Charge of Your Professional Liability Insurance.”  View Resource
Reliably Simple.
© 2019 LiabilityPro. All rights reserved.
|
Website by  One Branding  .