Articles Posted in Insurance

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A robust cybersecurity strategy involves sophisticated, overlapping protections. Along with up-to-date technology, well-trained employees and vigilant IT professionals, comprehensive insurance coverage is an often necessary ingredient of any protective “moat” shielding a company from damaging cyberattacks. Yet does a company’s cyber insurance package actually protect it from one of the most common forms of cyberattack—when a hacker goes phishing? In her post “Phishing for Insurance Coverage” on Pillsbury’s Policyholder Plus insurance blog, our colleague Peri Mahaley examines a variety of surprising phishing-related exclusions one might discover in a company’s cyber coverage.

 

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Transformative technologies do not just change their own industries—they cause a ripple effect throughout adjacent, more mature sectors. Just as the sudden, mass embrace of augmented reality in Pokémon GO opens up a number of liability concerns, so, too, will the advent of autonomous vehicles (the embrace of which is markedly more measured, but just as inevitable) necessitate changes in the insurance industry and the products it provides. In their post, “Robot Take the Wheel: Insurance Implications of Autonomous Vehicles,” colleagues Peter Gillon and Bryan Coffey examine some of the likely paths these changes may take.

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Recently, the Fourth Circuit handed down one of the first appellate-level decisions involving insurance coverage for a cyber-related event. The ruling is likely to create ripples among both carriers and company insureds, as it establishes the possibility that, under a general liability policy, a carrier may still be on the hook to cover cyberattacks or data breaches that are the result of a company’s negligence (as opposed to those stemming from a criminal attack, in which the company is the victim). In their Client Alert on the Fourth Circuit’s ruling, colleagues James Bobotek, Peri Mahaley and Benjamin Tievsky break down the ruling and its takeaways.

 

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Many people invest significant time, effort and in some cases real money to acquire virtual goods. There is great perceived value in these virtual goods. But there are a growing number of cases, where users have been the subject of hacking and other situations where they have had their virtual property stolen. See for example our prior blog entry on a massive theft of 400 billion poker chips from Zynga users.

Most game and virtual world operators try to shield themselves from claims of loss by their users through effective legal strategies embodied in their terms of service. In most cases, users are only granted a license to use the virtual goods, but they do not own them and the terms often make clear that there is no independent value to goods. Additional disclaimers and liability avoidance language may also be included. Yet, this has not stopped some users from suing for the loss of the perceived value of their virtual goods.

Given these potential claims, what else can companies do to protect themselves from such risks? Apparently, this risk may now be insurable – at least in China – thanks to a collaboration between Sunshine Insurance Group and Gamebar.  According to a report, by China Daily a Sunshine Insurance spokesperson said “The insurance will help to reduce operating risks for online games
companies as the companies which purchase the insurance will be covered
to compensate customers in the event of lost or stolen property.”

It will be interesting to see if that catches on in the US and elsewhere, and if so, what will be covered and what will not. Check back for updates.