As previously reported here, (Nov. 8, 2017), companies falling victim to electronic impersonation (“spoofing”) schemes have frequently turned to “computer fraud” coverage found in typical crime policies. In this type of fraud, someone impersonates a vendor, contract partner, or company executive via email or other electronic means, and directs the transfer of funds to an account connected to the fraudster. Courts adjudicating insurance coverage actions arising out of these schemes have reached quite disparate…

It is becoming increasingly important for tech companies considering a merger, acquisition, or other corporate transaction to understand the use of Representation & Warranty Insurance (“R&W Insurance”). R&W Insurance is a type of insurance policy purchased in connection with corporate transactions; it covers the indemnification for certain breaches of the representations and warranties in the transaction agreements. It is designed to provide additional flexibility in addressing these obligations by, for example, reducing or eliminating the…

I have several times discussed the need for cyber insurance that will actually cover reasonable claims; a need that still seems to exist. The case of Hub Parking Technology USA v. Illinois National Insurance Company (https://www.law360.com/articles/1170778/parking-tech-co-says-aig-must-defend-it-in-privacy-row) that was brought in Pennsylvania District Court in June of this year illustrates this problem. Hub bought security and privacy insurance that was intended to cover security breaches and disclosure of personal data in violation of privacy…

A policyholder is usually thrilled when its insurer agrees to provide a defense of a claim. However, all too often, an insurer’s position on how that defense is to be provided surprises the policyholder. Sometimes, the policyholder learns for the first time that it does not have the right to select defense counsel. Other times, it learns that it is allowed to select defense counsel but must do so from a list of pre-approved panel…

CCPA Week Webinar (FREE), July 17, 2019 1:00 p.m. PT Insurance policies are some of a company’s most valuable assets during times of increased risk and uncertainty. Yet, corporate policyholders often leave money on the table by failing to thoughtfully construct their insurance program to respond to the risks inherent in their business and neglecting to properly manage potential insurance claims. In recent years, data privacy and security has become a growing source of corporate…

Directors & Officers liability insurance—commonly known simply as D&O insurance—is meant to protect corporate directors and officers from, among other things, claims alleging breaches of duty and management failings that adversely affect the value of the company’s stock. And any event in which directors or officers are deemed to have had an oversight function could ultimately result in a claim that floats up to the director- or officer-level if the company’s stock suffers. …

In the wake of numerous high-profile electronic data breaches, companies are justifiably concerned about beefing up their cybersecurity programs and ensuring that they have adequate insurance coverage in the event of an electronic data breach. While the unauthorized disclosure of sensitive electronic data, whether through cyberattacks, insider malfeasance, inadvertence, or otherwise, is, of course, a substantial risk that must be addressed in any cyber insurance program, businesses should also understand and insure against their potential…