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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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23 Feb 2017 Insurance Coverage Basics for Cloud Computing: 3 Cs to Remember

  Authored by Scott Godes and Kara Cleary   The privacy and security of data continues to be a hot button issue for companies, with privacy and security events frequently in the news. What about for businesses that have moved to the cloud? Whether you are a cloud provider or a cloud user, data breaches and denial of service attacks are real risks. Have you considered whether and how your insurance program will respond to those risks? Here are three terms to remember that may help simplify some of the coverage issues:   Computer System: Some insurance policies, which provide coverage for cybersecurity and privacy risks, have coverage that could turn on whether there was an impact to your “computer system.” A best practice is…

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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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13 May 2016 Scott Godes Quoted in Law360, “4 Tips for Law Firms to Maximize Cyber Coverage”

Scott Godes, partner and co-chair of the firm’s Data Security and Privacy Practice Group, was recently quoted in “4 Tips for Law Firms to Maximize Cyber Coverage,” published by Law360.   The article notes that law firms handle a wide variety of confidential client data, and comments on the importance of having insurance to cover related risks.  The article gives tips about policy terms, conditions, and exclusions that, in a perfect world, law firms should think about when buying coverage.   Law360 asked Scott about using the cloud and outsourcing data storage and processing.  Scott is quoted saying, “To the extent a law firm is relying on cloud providers for storage, processing or some other service, ‘cloud’ or ‘outsourced support’ should be included in the…

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09 Nov 2015 Scott Godes Quoted in Business Insurance “Cyber Security Bill Passes Senate Muster”

Scott Godes, partner and co-chair of the firm’s Data Security and Privacy Practice Group, was recently quoted in a Business Insurance article, “Cyber security bill passes Senate muster.”   In a 74-21 vote in October, the U.S. Senate approved The Cybersecurity Information Sharing Act of 2013. It protects businesses against liability if they share information with governmental agencies.   The good thing about the Senate bill is “it allows for comparing notes and provides liability protection for companies” that share risk information and “fosters a sense of working together among companies,” said Scott.   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 & Thornburg…

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08 Oct 2015 Regulation S-P Violation: Are You Prepared For A Cyber-Security Breach?

On Sept. 22, 2015, the Securities and Exchange Commission (SEC) announced the first violation by a registered investment advisor of the so-called Safeguards Rule (Regulation S-P) pertaining to the protection of personally identifiable information from cyber-attack. This is the first instance of the SEC enforcing Regulation S-P against an investment advisor.   The Regulation, broadly speaking, requires broker-dealers, investment advisers and other financial firms to protect confidential customer information from unauthorized release to unaffiliated third parties. Included in Regulation S-P is the “Safeguard Rule” (Rule 30(a)), which requires financial institutions to, among other things, adopt written policies and procedures reasonably designed to protect customer information against cyber-attacks.  This raises the question:  Are you prepared for a cyber-attack (and the attendant liability)?   In its findings,…

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26 May 2015 Scott Godes to Speak at Upcoming ACI Cyber & Data Risk Insurance Conference

Scott Godes, partner and co-chair of the firm’s Data Security and Privacy Practice Group, will be speaking at an upcoming ACI Cyber & Data Risk Insurance Conference, Sept. 30 – Oct. 1.   Scott’s presentation, “Credit Card Exposures and What to Expect from the Implementation of Chip and Pin Technology,” will provide more information on: How major credit card brands are dealing with increased fraud Reducing security threats with the new chip and pin technology Point of sale exposure for companies that accept credit cards and more Insurance coverage issues for these exposures   The Cyber & Data Risk Insurance conference provides maximum opportunities to learn from and network with underwriters, brokers, claims managers and industry leaders, helping you keep pace with the ever-changing cyber…

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