Law Firms Under Cyber Siege

Law firms are under Cyber siege. The headlines focus on the large law firms. However, small and midsize law firms are also susceptible to damages from cyber attacks.

Kaestner & Berry is proud to work with SafeLaw. SafeLaw offers standalone cyber risk protection created for the unique cyber risks of law firms. The SafeLaw policy was designed to fill gaps in Lawyers Professional Liability and protect law firms from first and third party cyber risk losses including:

  1. Confidentiality and Privacy Breach Liability: This is protection from third parties for the firm’s failure to prevent disclosure of personally identifiable information, information subject to attorney client privilege, data subject to a non-disclosure agreement and other confidential information.
  2. Regulatory Proceedings, Fines and Penalties Liability: Third-party legal liability protection for regulatory, administrative, or disciplinary proceedings as well as resulting fines and penalties due to a data breach or the firm’s failure to comply with privacy, identity theft, data security or data breach notification laws. Coverage also extends to violations of PCI standards.
  3. Network Security Liability: Third-party legal liability protection for the firm’s actual or alleged failure to prevent the transmission of hacker attacks, or denial of service attacks.
  4. Multimedia Liability: Third-party legal liability protection for copyright infringement, trademark infringement, and defamation arising out of the firm’s electronic publishing.
  5. Data Breach Response Expense: First-party coverage for the firm’s expenses following a data breach including access to a panel of data breach response experts such as I.T forensics, legal advisors, public relations, victim notification, call center support, credit monitoring and identity theft remediation.
  6. Electronic Data Restoration Expense: First-party coverage for the firm’s expenses to recreate or restore data, software, or firmware that is corrupted or damaged by a hacker attack, virus, denial of service attack, or administrative errors.
  7. Business Income Loss: First-party coverage for the firm’s loss of income and extra expenses due to computer system disruption caused by a hacker attack, virus, denial of service attack, or administrative errors.
  8. Cyber Crimes: First-party coverage for theft of the firm’s money, securities or other property due to fraudulent funds transfers or fraudulent use of the firm’s computer system to steal money, securities or other property.
  9. Cyber Extortion: First-party coverage for the firm’s expenses to mitigate or terminate cyber extortion or ransomware threats.

If you do not have a standalone SafeLaw policy you will find that your business is Not protected for one or more of these risks. Contact Kaestner & Berry for a SafeLaw Cyber quote.

When To Report A Claim

When To Report A Claim

All Lawyer Professional Liability (LPL) policies are on a “Claims Made Basis”. To be more specific, this means the coverage is typically triggered when the claim is made against the insured and reported to the appropriate carrier.

Insurance underwriters are obviously interested in not providing coverage to an attorney who buys coverage after he or she is already aware of a claim or a potential claim. The carriers address this risk in two ways.

The application always asks an attorney if he or she is aware of a claim or potential claim that has not yet been reported. Under Missouri law, if this is presented as a “representation” in the application, the insurance company must proof the misrepresentation was false and material.

A “Claims Made” policy also provides there is no coverage for claims known but not reported during the policy period. This is set forth in the coverage section of the policy. As a result the insurance company does not have to demonstrate “prejudice” with this coverage defense. See Continental Casualty v. Maxwell 999 S.W.2d 882 (MO app 1990).

The bottom line is that the failure to report a claim or a matter that may give rise to a claim during the policy period that the attorney becomes aware of the matter, will jeopardize the coverage.

Contact Kaestner & Berry if you have any questions.