As we have noted in a prior post (see here), law firms have valuable information and are vulnerable to cyber attacks – and need Cyber Risk Insurance (also called Data Breach, Privacy and Network Security insurance coverage).
Recent events have highlighted and heightened this exposure, starting with reports of attacks on large law firms. Reports from the FBI and others (see here, here, here and here) have noted that hackers have targeted the largest law firms in the US and have stolen confidential client information. Experts are speculating that confidential information was stolen to assist with trading on insider information, but it is too early to know what was stolen and why.
In our prior post we noted why law firms might be cyber targets. But after the most recent attacks, experts have simplified the logic (see here & here). Law firms have client information, some of which is highly confidential and includes financial information. And law firms’ IT security and cyber awareness is often less sophisticated than their clients’ IT security.
And now we have the Panama Papers (see here, here and here), which shows the potential magnitude of damage from a law firm breach. Approximately 11.5 million financial and legal records relating to offshore companies were stolen and released to the media. It appears that at least some, if not many, of these companies are being used by criminals and tax evaders to protect large sums.
What does this mean for a small law firm? The combination of information and vulnerability at a law firm of any size creates significant cyber risk exposure (see here), and Cyber Risk Insurance should be part of any risk mitigation strategy. The good news is that Cyber Risk Insurance is not expensive for small and medium size organizations.
Cyber Risk Insurance is an essential coverage for businesses of all sizes for protection from both criminal attacks and employee error, particularly for law firms, and it should not be optional. Coverages vary widely and can be tailored to your client’s exposure.
Tennant Risk Services is a specialty wholesale broker and underwriting manager, and delivers expertise, markets and exemplary services to our retail insurance agent clients in the placement of professional liability insurance (E&O, D&O, EPL, Cyber). We excel at hard to place accounts. Review our expectations here.
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