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27 Jul 2018 Will Your Company’s Insurance Cover Losses Due to Phishing and Social Engineering Fraud? Six Tips for Evaluating and Seeking Coverage for Business Email Compromises

If your company fell victim to a business email compromise – a scam that frequently involves hackers fraudulently impersonating a corporate officer, vendor, business partner, or others, getting companies to wire money to the hackers – would your insurance cover your loss?  There is reason to be concerned about this sort of attack, as the FBI has explained that the “scam continues to grow and evolve, targeting small, medium, and large business and personal transactions. Between December 2016 and May 2018, there was a 136% increase in identified global exposed losses” in actual and attempted losses in U.S. dollars.  The good news for policyholders is that courts across the country have been ruling that crime insurance policies should provide coverage for this sort of loss,…

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24 May 2018 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues – Part 2

This article is the second part in the series, The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues. It was prepared in connection with PLI’s Cloud Computing conference. It was authored by Barnes & Thornburg attorneys, Scott Godes, Kara Cleary, Heidi Fessler and Michael Baumert.   Insurance Coverage Issues for the Cloud   In addition to the insurance best practices mentioned above, the cloud can raise multiple insurance issues that should be considered carefully.  For example, how would insurance provide coverage to the cloud provider or the user if there were a data breach or denial of service attack?  But, there are other events in the cyberspace that both cloud providers and users should consider, such as the situation where users cannot access the cloud…

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24 May 2018 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues – Part 1

This article was prepared in connection with PLI’s Cloud Computing conference. It was authored by Barnes & Thornburg attorneys, Scott Godes, Kara Cleary, Heidi Fessler and Michael Baumert.   The reality that business data of all kinds is now stored, managed, accessed and maintained in the cloud is inescapable.  The reasons for this migration of data from within an organization’s network computing system to a vended cloud provider are infinitely varied.   Whatever the reason fueling the migration of data, one thing is certain – coupled with the movement of data and the use of cloud services is the introduction of additional risk.  It’s true that many companies will actually improve the security of their data by shifting to the cloud.  In many cases, companies…

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19 Dec 2017 Who Gets Coverage? Cyber Insurance and Credit Card Risks: Will Coverage Apply After the P.F. Chang’s Denial?

Authored by Scott Godes & Devin Stone   When a retailer or merchant purchases a broad cyber insurance policy to cover hacks or breaches of its point of sale systems, it could be forgiven for thinking that its insurance policy would cover the costs of fraudulent charges and card replacement costs – which can represent the majority of damages generally incurred in a payment card incident – demanded by the payment processor or the card brands. But one recent decision in the Federal District Court of Arizona has held that certain cyber insurance policies do not provide coverage for those damages. P.F. Chang’s China Bistro, Inc. v. Federal Ins. Co., 2016 WL 3055111 (D. Ariz. May 31, 2016), appeal dismissed pursuant to settlement, No. 16-16141, Dkt….

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05 May 2017 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues (Part 2)

  By Scott Godes, Kara Cleary and Heidi Fessler   In part two of this series, we continuing exploring the benefits, risks and insurance coverage issues associated with the cloud. Read part one here.   Insurance Coverage Issues for the Cloud   In addition to the insurance best practices mentioned in part one, the cloud can raise multiple insurance issues that should be considered carefully. For example, how would insurance provide coverage to the cloud provider or the user if there were a data breach or denial of service attack? But, there are other events in the cyberspace that both cloud providers and users should consider, such as the situation where users cannot access the cloud for data, applications, or other purposes and their business…

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03 May 2017 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues (Part 1)

  By Scott Godes, Kara Cleary and Heidi Fessler   The reality that business data of all kinds is now stored, managed, accessed and maintained in the cloud is inescapable. The reasons for this migration of data from within an organization’s network computing system to a vended cloud provider are infinitely varied. In this two-part series, we will explore the benefits, risks and insurance coverage issues associated with the cloud.   Whatever the reason fueling the migration of data, one thing is certain – coupled with the movement of data and the use of cloud services is the introduction of additional risk. It’s true that many companies will actually improve the security of their data by shifting to the cloud. In many cases, companies are…

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06 Sep 2016 Scott Godes Quoted in Law360’s “3 Tips For Manufacturers To Insure The Internet Of Things”

Scott Godes, partner and co-chair of the firm’s Data Security and Privacy Practice Group, was recently quoted in “3 Tips For Manufacturers To Insure The Internet Of Things,” published by Law360.   Law360 recently wrote an article about the risks that manufacturers of IoT products face in connection with cybersecurity and data privacy. In the article, Scott said: “You would hope as a cyberinsurance buyer that a privacy or network security incident would be covered under your policy, regardless of whether it is based on an internet of things incident or a more traditional infiltration of a network server.”   Read the full article here. Scott GodesScott N. Godes is a veteran trial lawyer with experience in insurance coverage matters and technology issues. He is a partner in…

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02 Aug 2016 Scott Godes Quoted in Law360’s “Insurance Regulation And Legislation: Midyear Report”

  Scott Godes, partner and co-chair of the firm’s Data Security and Privacy Practice Group, was recently quoted in “Insurance Regulation And Legislation: Midyear Report,” published by Law360.   In the article, Scott pointed out that European authorities have stated that the Privacy Shield ensures that every complaint against a company over purportedly lax data security practices will be dealt with and resolved. As such, corporate policyholders engaging in trans-Atlantic data transfers need to re-examine their insurance programs and make sure their coverage is broad enough to address the costs of responding to consumer and regulatory actions.   Read the full article here. Scott GodesScott N. Godes is a veteran trial lawyer with experience in insurance coverage matters and technology issues. He is a partner in Barnes &…

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24 May 2016 Scott Godes quoted in Law360 Article “Policyholders Get Digital Fraud Coverage Boost at 8th Circ.”

Scott Godes, partner and co-chair of the firm’s Data Security and Privacy Practice Group, was recently quoted in “Policyholders Get Digital Fraud Coverage Boost at 8th Circ.,” published by Law360.   On May 20, the Eighth Circuit found that a bank employee’s failure to secure a computer network does not nix insurance coverage for a fraudulent transfer loss caused by a hacker, which in turn bolsters policyholders seeking coverage for digital fraud by blaming the hacker despite the employee’s negligence.   Scott is quoted numerous times in the article, including one note stating “A key point in the decision was the court’s finding that even if employees were negligent, that doesn’t convert a direct loss into an indirect loss. That holding should help policyholders secure…

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17 May 2016 Does a CGL Insurance Policy Cover a Data Breach? The Fourth Circuit Says ‘Yes’

Introduction   If you have anything to do with cybersecurity, privacy, or insurance, you undoubtedly have heard that the U.S. Court of Appeals for the Fourth Circuit ruled in April that a Commercial General Liability (CGL) insurance policy provides coverage for a data breach, in the case Travelers Indemnity v. Portal Healthcare Solutions.  In the last few years, insurance companies have been marketing cyberinsurance policies as the product designed for cybersecurity and privacy risks.  So how could it be that a CGL insurance policy – which insurance company lawyers proclaim were not “meant” to cover data breaches – provides coverage for data breaches?  We discuss the well-reasoned Portal Healthcare decision, which bolsters policyholders’ rights to collect under CGL policies, below.   The first question when…

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