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Check for Cyber Liabilities During Acquisitions

Caution your clients to check for cyber liability exposures when they acquire a new company. This was among the topics at a recent Cyber Liability Practice Group teleconference.

SullivanCurtisMonroe’s Patrick Hernandez, newly selected as chair of the practice group, brought two recent issues to the attention of the group. The City of San Diego is suing Experian for a data breach that affected 250,000 people in the city. Panerabread.com apparently failed to encrypt customer records for eight months.

Here are additional comments from the meeting:

  • Endeavor Insurance Services has a new offering to provide coverage in case of remote access to data.
  • RiskProNet members are receiving client requests for help in identifying cyber vulnerabilities. One RiskProNet member has partnerships with law firms to provide guidance, while another refers clients to the Chubb vendor list. SullivanCurtisMonroe is preparing a list of vendors in this area, and will share the list via the slack channel.
  • Check policies for the following language:

–Does the definition of the insured include independent contractors, interns and volunteers?

–Most policies define covered territory as anywhere in the world. Consider a policy that covers territory anywhere in the universe, given today’s transmission of data via satellite.

–What happens if there is a dishonest employee?

–Will EPLI coverage apply to cyber breaches that could result in disclosure of information about employees?

 

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