Hackers Don't Care About Your Insurance

This post was written by Brian Himmel, Andy MossDavid Weiss and Cristina Shea.

A recent study reports that the median amount of time between a breach of a company’s computer network and the discovery of the incident is 229 days. But some cyberliability policy forms require that both the breach event and discovery of loss (or resulting claim) occur during the policy period. So what happens when a breach is discovered three months into the policy period but, unbeknownst at the time, the intrusion actually occurred six months before, or even earlier? If your company’s cyberliability insurance policy excludes breach events occurring before the inception of the policy period, the company could find itself without coverage for an otherwise-covered claim or loss.

The use of retroactive dates and extended reporting periods to avoid such a gap in coverage is addressed in a Client Alert issued by members of Reed Smith’s Insurance Recovery Group. Retroactive dates extend the policy’s coverage back to a date earlier than the actual policy period, with the goal of covering events that already occurred but had not been discovered at the time the policy was purchased. An extended reporting period lengthens the period of time, beyond the expiration of the policy period, during which a claim or loss can be made against the insured and reported to the insurance company. These provisions can provide a critical protection under a cyberliability insurance program given the delays that may exist between a breach and its discovery.
 

As Federal and State Agencies Warn of Increased Cyber Threats, Insurance Incentives for Compliance with NIST Cybersecurity Framework May Be on the Horizon

This post was written by J. Andrew Moss and Emily Garrison.

Since the President’s February 2013 Executive Order directing the National Institute of Standards and Technology (NIST) to lead the development of a voluntary framework to address and reduce cyber risks, the agencies and stakeholders involved have been exploring whether to tie the February 2014 Framework for Improving Critical Infrastructure Cybersecurity (the NIST Framework) to incentives such as cyberliability insurance. For example, in a Report to the President on Cybersecurity Incentives, the Treasury Department suggested that “[c]yber insurance can promote adoption of stronger security measures” because, among other reasons, “insurers could require policyholders to comply with minimum security standards as a condition of insurance coverage, including adoption of the Framework.”

The Treasury Department held a public meeting on November 6 that included a discussion of developments in the market for cyberliability insurance and the NIST Framework.

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Getting the Corporate Deal Done: A Little Insurance Knowledge Goes a Long Way

By Laura Geiger and John Vishneski

A company’s insurance program is an asset that is often ignored during corporate transactions. This is a mistake. Understanding the insurance assets available and how to maximize insurance assets during a corporate transaction will give companies an advantage at the negotiating table. Failing to maximize coverage during a corporate transaction can have disastrous results. The attorneys in Reed Smith's Insurance Recovery Group can counsel companies engaging in corporate transactions on these complicated issues. Good insurance counsel make the transaction process easier and ensure that insurance asset value is maximized. 

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Coverage For Construction Defects

By Paul Walker-Bright

A hypothetical: The roof of a parking garage that is part of a condominium development partially collapses, destroying landscaping over the collapsed section of the roof and the floors underneath the collapsed section. The roof had been fully installed and the parking garage was being used at the time of the collapse, but work continued on the landscaping and the condominium units. The cause of the collapse is traced to roof beams not strong enough to withstand the load of the landscaping. The design of the parking garage called for weaker roof beams. The roof beams cannot be replaced, and consequently the landscaping over the rest of the roof must be removed and replaced with lighter materials to prevent further collapses.

This hypothetical, which is not an outlandish scenario in the construction business, raises a myriad of coverage issues under several different types of policies, including first party property, builder’s risk, general liability and professional liability policies. The attorneys in Reed Smith's Insurance Recovery Group have extensive experience advising policyholders and engaging in litigation regarding these types of coverage issues.

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Answers To The Most Common And Perplexing Questions About Professional Liability Coverage

Reed Smith partner Tom Marrinson, resident in the firm’s Chicago office, has been advising policyholders about their insurance coverage, and representing them in coverage litigation, for more than 20 years. While Tom’s experience ranges widely, he has literally written the book on insurance coverage for professionals and companies that employ them

Professional Liability Insurance, published by Law Journal Press, is written to appeal to both the neophyte and those with considerable experience in the area of professional liability insurance. The book begins with some of the basics of professional liability insurance (such as, who is a "professional" and what types of services are considered "professional services") and how a professional liability insurance policy is put together, in an attempt to provide a basic background for the more in-depth look that the book takes at some of the other issues confronting those involved in professional liability insurance disputes.

 

 

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Insurance Coverage Legal Audits are Not a Luxury

This post was written for  Boardmember.com

Most executives view insurance with disdain, because it makes no immediate contribution to production, research and development or marketing. Ordinarily, insurance has no tangible results and does not improve the balance sheet. It does not increase stock value. Generally, insurance represents a pure expense detracting from the bottom line. Few officers and directors truly appreciate insurance and even fewer actually understand it. Properly assessed insurance, however, can be one of the best investments the corporation will hopefully never use.

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Welcome (A/K/A Why You Should Spend Time Here)

Welcome to The Policyholder Perspective, the brand new blog of Reed Smith's Insurance Recovery Group!

We know that some of you are longtime clients of Reed Smith, and have stopped by the blog because the lawyers with whom you work suggested it would be of interest. We thank you for your trust in us, and hope that our relationship will continue to grow.

And we know that some of you found us through Google or another search engine, and have not worked with us in the past. We, of course, hope that you will do so in the future, and invite you to contact any member of our group if you have insurance questions.

However you found us, we hope you will stay a while and will come back often. We plan to update this blog regularly with our latest thoughts regarding cutting-edge issues of interest to all commercial policyholders. Our lawyers have experience in all types of commercial insurance, and plan to share their thoughts here, whether with respect to AIG's meltdown, an important coverage decision, strategies for renewing your policies, or how to protect and maximize a pending claim. We'll touch on all areas of commercial insurance, from first-party property to D&O, from CGL to fidelity bond, and everything in between.

So go ahead and browse, and don't hesitate to drop us a line with suggestions about how we can make this site more useful to you.