According to LogicForce, only 23% of law firms have Cyber Risk Insurance and the industry scored only 43% on their cyber security health.
LogicForce recently released their quarterly report card on law firm cybersecurity (see here & here), which involved a survey of 200 law firms of various sizes. Cyber Risk Insurance (also called Data Breach, Privacy and Network Security insurance coverage) implementation was one of the factors reviewed, with most firms not buying coverage.
And some firms indicated that insurance reduces the need for cyber security (see here):
Firms assume that, since they have cybersecurity insurance, there is no need to take other steps toward being secure.
This is, of course, incorrect. A cyber attack can have impacts well beyond pure financial loss, such as loss of customers through reputational loss. And underwriters are beginning to increase the cyber security requirements in order to obtain insurance.
Law firms face a wide range of cyber threats, including the breach of confidential information, ransomware and social engineering fraud (see prior post here). As we noted in a prior post (see here), 24% of law firm CLOs reported a breach in the last 24 months.
Cyber Risk Insurance is an essential coverage for law firms, and also businesses of all sizes, for protection from both criminal attacks and employee error; it should not be optional. Coverages vary widely, and so a thorough review is essential to ensure that comprehensive coverage is in place.
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 and specialty insurance (E&O, D&O, EPL, Cyber Risk, Specialty). We excel at hard to place accounts.
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