Many businesses rely upon social media to raise awareness and enhance visibility of a new product or new line of business. Social media platforms such as Facebook are often used to generate buzz around an opening or a launch before it takes place. Anticipatory use of social media, however, can complicate insurance coverage if the right policies are not already in place. The Idaho Supreme Court recently upheld the denial of coverage to a business that had published a preview of a new logo prior to opening. Scout, LLC v. Truck Ins. Exch., 434 P.3d 197 (2019). The court held that a Facebook post by the insured pub showing a close facsimile of the anticipated logo constituted a “prior publication,” triggering an exclusion under the pub’s subsequently purchased commercial general liability policy. Although some other courts have reached different conclusions in relatively similar circumstances, the case stands as a cautionary tale for new businesses. Continue Reading Social Media and New Businesses: Can Anticipatory Use of Social Media Threaten Insurance Coverage?
Title III of the Americans with Disabilities Act (ADA) provides that
No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.
42 U.S.C. Section 12182(a). What about a website? Is that a “place of public accommodation”? The answer to that question could make a big difference in determining whether your business faces legal risks and whether you can protect against those risks with insurance. A recent decision out of the Ninth Circuit highlights the split in United States jurisdictions about whether a website is subject to the prohibitions against discrimination found in the ADA. Continue Reading Protecting your Website with an EPL Insurance Policy
Despite the increase in data breaches and cyberattacks involving large corporations, efforts to hold directors and officers personally liable for these events have largely been unsuccessful. However, recent developments in two high-profile data breach cases suggest that the relative safety directors and officers have previously experienced from cybersecurity-related suits may be coming to an end. On January 4, 2019, the Superior Court of California approved a $29 million settlement in consolidated derivative litigation brought against directors and officers of Yahoo, Inc. arising out of two data breaches compromising sensitive information of over one billion Yahoo users. See In re Yahoo! Inc. Shareholder Litig., Case No. 17-CV-307054, (Cal. Supp. Ct Jan. 4, 2019). This settlement, which includes a court-approved plaintiff’s counsel’s fee of $8.6 million, represents the first significant recovery in a data-breach related derivative lawsuit targeting directors and officers for breach of fiduciary duty. Continue Reading Recent Developments in Yahoo and Equifax Data Breach Litigation Suggest Increased Risk of Personal Liability for Directors and Officers for Cybersecurity Incidents
Selecting an appropriate cyber insurance policy can seem daunting. There are a number of different cyber events that have the possibility to impact businesses differently based on a number of factors, including the company’s network design and cyber security readiness. The market for cyber insurance policies does not have a widely-accepted form that is predominantly used by carriers, brokers, or policyholders, resulting in approximately 70 carriers drafting their own cyber insurance policies, many of which are negotiable. Lastly, the risks and technology at issue evolve quickly, adding uncertainty and the potential for a “new” event that may not be covered appropriately by your company’s current policies. Continue Reading Evaluating Your Company’s Coverage for Ransomware Attacks Under Its Cyber Insurance Policy
The recent series of significant hacks to Marriott, Target, Anthem, Home Depot, and other businesses make it clear that there is now another inevitable event to add to death and taxes, namely intrusions to businesses’ on-line databases of their customers’ personal information. These intrusions include outside vigilante hackers who are simply trying to sell their services and then try to incite the government or private plaintiffs to assert damage claims against the targeted businesses from the exploited vulnerabilities. To counteract the inevitability of such intrusions, cyber-security providers and insurance companies are now considering offering a new product that would combine guarding against unwanted intrusions with guaranteed coverage for the cost of the inevitable hack. The product would basically warrant that there will be no damaging access or release of on-line data, and would provide a specified but limited payment to compensate for any damages should an intrusion and/or release of data nonetheless occur. Continue Reading Developments in Cyber-Coverage Options
On November 9, 2018, the Ninth Circuit certified an important coverage question to the Washington Supreme Court about whether a certificate of insurance (COI) purporting to add T-Mobile as an additional insured on another company’s insurance policy binds the insurance company listed on the certificate. T-Mobile USA Inc. v. Selective Insurance Company of America, 908 F.3d 581 (9th Cir. 2018).
The case should serve as a reminder that businesses may not be able to rely on, and should not rely on, a certificate of insurance alone when they sign agreements with third parties who are supposed to add them as additional insureds. Continue Reading How Valuable is that Certificate of Insurance?
Welcome to The Perkins Coie Tech Risk Report, a source for updates on, and analysis and interpretation of, insurance issues relevant to emerging technologies. We will address coverage issues related to cyber coverage, privacy, digital assets like cryptocurrency, Blockchain and other emerging technologies. The blog is written for start-ups and other companies dealing with emerging issues in the technology industry.
Attorneys from Perkins Coie’s Insurance Recovery Group will be the primary content authors. They will be joined from time to time by attorneys from other practice groups, such as the firm’s Blockchain and Virtual Currency, Emerging Companies, Technology Transactions and Privacy and Data Security practice groups.
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In an all too common scenario, someone in your organization’s finance department receives an email that purports to be from a supplier informing your organization of the supplier’s supposedly changed bank account and a request for you to make all future payments to the new account. Even after some likely back and forth via phone and/or email with the “supplier,” your employee ultimately changes the payment information in your systems, and future invoices are paid to the new pay-to account. Everything seems fine for a while, and then the problems begin.
Eventually, your company receives an email from the supplier asking why it hasn’t received payment of its recent invoices. When the supplier insists that it has not received payment, in spite of your company’s assurances that all invoices have been paid, your IT department investigates. The IT team figures out that the emails with the new payment information and the phone calls were fraudulent—they were not from your supplier but from a bad actor. It is, of course, too late to recover the fraudulently obtained payments, and in the interest of keeping the supplier, your company pays again. Continue Reading Social Engineering Fraud: Can You Expect Coverage?
Many contracts require that parties be added as “additional insureds,” but few contain specifics on what type of coverage should be provided. The gambit of additional insured provisions is far-ranging. Being proactive and ensuring that the additional insured coverage you are expecting is actually provided on the front end will eliminate a host of issues should you need to invoke coverage under the provision.
Additional insured coverage is normally provided by endorsement, at times listing specific entities or individuals and at other times providing blanket coverage for all that require it via contract. In theory, being included as an additional insured provides protection as if your company was a named insured on another’s policy. In reality, however, there are many variations of additional insured coverage that often contain restrictions on the rights of additional insureds under the policies. Continue Reading How to Maximize Protection Under Additional Insured Provisions
Thinking about including an unmanned aerial vehicle as part of your business? What could be cooler than having a UAV deliver your product to customers? Many companies are already using UAVs or drones not only for delivery but also for video surveillance, property surveying for agriculture or unique promotional videos. Your business will want to consider the basic rules for drone operation—like having an experienced pilot and a well-maintained drone— as well as other ways to manage potential risks.
There are a number of risks if your business has a connection to drones. What happens if a drone crashes or if a bystander shoots it down? In the evolving high-tech world, there are also real threats of someone hacking into your remote system and interfering with your controls. If there is a crash, there is a possibility you might be liable for the property of others. Drones can be a significant investment, and you will want to protect your asset and yourself if someone blames you for some loss. Continue Reading Attack of the Drones: How to Protect Your Business