Law firms tend to ignore the cyber threats until it is too late. Many are not carrying any cyber insurance unless a client requires it. Without carrying the proper insurance coverage actions or lack thereof to a data breach may cause more problems in the future. In addition to the indemnity payments for damages and required notifications, cyber insurance insurers have specialists that can bring the resources in play needed to do a proper investigation.
On March 27, Hiscox Insurance filed a lawsuit against Warden Grier LLP.
Hiscox only learned about the data breach via social media.
“On March 28, 2018, an employee at Hiscox learned by happenstance, through social media, that some of Hiscox’s PI had been leaked on the “dark web...
After a preliminary investigation, Hiscox learned that the PI made its way to the“dark web” as a result of the 2016 Data Breach.....
On March 31, 2018, Hiscox requested a call with Warden Grier about the situation. On the subsequent call, Hiscox for the first time learned the details of the 2016 Data Breach.”
Hiscox alleges in the lawsuit that Warden Grier failed to inform Hiscox about the data breach that happened in 2016 even though Warden Grier paid a ransom to keep the information of Hiscox clients off of the dark web.
“Warden Grier materially breached the Terms of Engagement and all implied contracts by failing to have appropriate measures in place to respond to the 2016 Data Breach, including conducting a prompt and adequate investigation into the 2016 Data Breach and notifying Hiscox of the 2016 Data Breach, and by failing to notify Hiscox and its insureds of the 2016 Data Breach....
Warden Grier’s conduct as described herein, namely, its failure to protect the PI, to adequately investigate the 2016 Data Breach and to advise Hiscox that its PI had been compromised, constituted a breach of Warden Grier’s fiduciary duties.”
After learning of the data breach Hiscox elected to notify their mutual clients of the data breach and states that Hiscox has suffered damages in excess of $1.5 million.
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Lee Norcross, MBA, CPCU
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