Ninth Circuit Questions if Broker Swift Enough in Notice and Resp

p39ppppWhile America was tuned into the big game one California insurance broker faced its own treacherous showdown in the form of a putative class action filed on February 8 2024 stemming from a data breach With cyber incidents still on the rise this is a story we know all too well an unauthorized third party gains access to personally identifiable information the company eventually detects the threat actor and leadership must decide how to respond Once notifications to the public go out the individuals impacted often file suit to recover for their alleged harmppAccording to the complaint in Ruma v Keenan Associates the third party accessed the protected information in August of 2023 and the broker learned of the breach soon thereafter The compromised repository contained information such as full names dates of birth Social Security numbers passport numbers drivers license numbers health insurance information and general health information Five months later individuals received notification of the breach in a notice that they allege was neither prompt nor accurate A putative class filed suit and asserted seven causes of actions negligence in data protection negligence per se related to violation of HIPAA and FTC rules unjust enrichment and breaches of confidence contract the covenant of good faith and fair dealing and fiduciary dutyppThough the Ruma case is still in its infancy it will certainly not be the last time a putative class seeks damages against companies falling victim to data breaches This case serves as a stark reminder of the necessity of cyber insurance including robust liability coverage as well as the necessity of maintaining adequate cyber insurance policy limits Indeed IBM published in its annual Cost of a Data Breach Report that the average cost of a data breach in the US is nearly 95 million as of 2023 nearly 5 million higher than the average cost of a data breach worldwide largely due to how litigious claimants in the US are A wellcrafted cyber insurance program can help protect the company and its directors and officers against followon lawsuits after a major cyber incident To ensure the policy responds as expected policyholders should ensure that their preferred defense counsel is preapproved on the policy by endorsement or is otherwise on the insurers preapproved panel counsel list With this end game in mind coverage counsel can provide invaluable guidance in deciding whether to modify existing policy provisions or seek different coverage such as a different policy form or new endorsements at renewal In some cases the difference between a covered and uncovered claim can be as simple as a minor tweak to exclusionary language or a request to add the companies preferred vendors by endorsementppListen to this postppPost Your Public Notice Todaypp ppSign Up for eNewsBulletinspp ppYou are responsible for reading understanding and agreeing to the National Law Reviews NLRs and the National Law Forum LLCs  Terms of Use and Privacy Policy before using the National Law Review website The National Law Review is a free to use nolog in database of legal and business articles The content and links on wwwNatLawReviewcom are intended for general information purposes only Any legal analysis legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice No attorneyclient or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms attorneys or other professionals or organizations who include content on the National Law Review website If you require legal or professional advice kindly contact an attorney or other suitable professional advisor  ppSome states have laws and ethical rules regarding solicitation and advertisement practices by attorneys andor other professionals The National Law Review is not a law firm nor is wwwNatLawReviewcom  intended to be  a referral service for attorneys andor other professionals The NLR does not wish nor does it intend to solicit the business of anyone or to refer anyone to an attorney or other professional  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us ppUnder certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements Attorney Advertising Notice Prior results do not guarantee a similar outcome Statement in compliance with Texas Rules of Professional Conduct Unless otherwise noted attorneys are not certified by the Texas Board of Legal Specialization nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional CredentialsppThe National Law Review National Law Forum LLC 2020 Green Bay Rd Suite 178 Highland Park IL 60035  Telephone  708 3573317 or toll free 877 3573317  If you would ike to contact us via email please click hereppCopyright 2024 National Law Forum LLCp