Monthly Archives: August 2009

Steve Goldberg on Chinese Drywall and Insurance Coverage

My prolific former colleague, Steve Goldberg, just wrote a piece regarding insurance coverage for potential Chinese drywall liabilities.  In the piece, Steve discusses another piece on Chinese drywall and insurance coverage for builders and subcontractors, by John M.Sadler of Sadler and Company, which also has appeared in Claimsjournal.com.  Steve notes what may be an open secret amongst those who represent policyholders in insurance coverage disputes:

John points out, what many of us policyholder insurance coverage lawyers already know. When many serious liability risks arise, many insurers, as one famous court decision once stated in a products liability context, run for cover rather than coverage.

Steve discusses other issues relating to insurance coverage for potential Chinese drywall liabilities, and cites an article on the issue co-authored by our former colleague Leon Kellner, “Chinese Drywall, Legal, Insurance, and Other Strategic Considerations” in the Florida Homebuilders Association Magazine.

For Steve’s full post, click here.

Disclaimer:

This blog is for informational purposes only. This may be considered attorney advertising in some states. The opinions on this blog do not necessarily reflect those of the author’s law firm and/or the author’s past and/or present clients. By reading it, no attorney-client relationship is formed. If you want legal advice, please retain an attorney licensed in your jurisdiction. The opinions expressed here belong only the individual contributor(s). © All rights reserved. 2009.
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Join Me for Insurance Coverage for Cybersecurity CLE Hosted by the Pennsylvania Bar Institute.

On Wednesday, August 26, 2009, I’ll be presenting a CLE for the Pennsylvania Bar Institute on insurance coverage for cybersecurity liabilities.  Here’s a snapshot of the PBI’s page so that you can sign up.

Business Law | Insurance Practice
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Tele-Web Seminar

Tele-Web Seminar
Insurance Coverage for Cybersecurity

1.5 Total CLE credits (No Ethics)

Note: This tele-web seminar will begin on Wednesday, August 26, 2009 at 12:00 PM to 1:30 PM Eastern Time.
Product №: 6116T
Course Level: Intermediate
Duration: 90 minutes

Register Now
Item Description | Faculty | Pricing

Item DescriptionThe financial liability of failing to protect information properly can be extraordinarily high.  One way in which to protect your clients and yourself from liability is to obtain cybersecurity insurance.  This program examines this relatively new type of insurance, the pros and cons of obtaining it, and will help you to help your clients explore their options.

Our faculty will discuss:

  • An overview of cybersecurity and data breach risks and potential liabilities
  • How “traditional” insurance coverage might cover cybersecurity and data breach risks and liabilities
  • New insurance products in the marketplace for cybersecurity and data breach risks and liabilities
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Pricing Back to top
  • Members–PA or any co. bar assn.
$99.00
  • Nonmember
$119.00

Faculty Register Now Back to top
Scott Godes, Esq., [formerly] Dickstein Shapiro, LLP, Washington, DC
Timothy Delahunt, Esq., Kenney, Shelton, Liptak & Nowak, LLP, Buffalo, NY
Arturo PerezReyes, Client Executive, Saylor & Hill, Oakland, CA
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Register NOW so you can print the course materials when they are available.
icon_acrobat Instructions (1 Page, 14 KB)
Contact us at 1-800-932-4637
Email us at callincle@pbi.org
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Disclaimer:

This blog is for informational purposes only. This may be considered attorney advertising in some states. The opinions on this blog do not necessarily reflect those of the author’s law firm and/or the author’s past and/or present clients. By reading it, no attorney-client relationship is formed. If you want legal advice, please retain an attorney licensed in your jurisdiction. The opinions expressed here belong only the individual contributor(s). © All rights reserved. 2009.

Coverage Disputes Over Data Breaches . . . (as summarized by HB Litigation Conferences)

On July 15, 2009, I gave a presentation regarding insurance coverage for data breaches for my friends at HB Litigation Conferences, along with Tim Delahunt and Arturo Perez-ReyesTom Hagy (yes, the “H” in “HB”) wrote a really nice blog post discussing and summarizing the content of the teleconference, which you can find by clicking here.

Tom opens the piece with a provocative title and subtitle, asking:

Coverage Disputes Over Data Breaches . . .

. . . A Deluge or a Dud?

He explains:

With hundreds of laws governing data privacy and the potential for billions of dollars in damages, you can’t help but think that insurance coverage disputes are about to fall on courts like confetti.

Maybe yes; maybe no.

Either way, companies need to pay as close attention to their insurance policies as they do their data protection policies.

Tom then gives a nice summary of the introduction and overview regarding potential insurance coverage for data breaches that I provided to the conference attendees:

Speaking on HB’s July 15 teleconference – “Private Data Breaches: Insurance Coverage Implications & Prevention – policyholder counsel Scott Godes [formerly] of Dickstein Shapiro told listeners that, despite what insurance counsel might say, “don’t write off your existing coverage” if looking for protection. He also said to know the window of time to get your notice in quickly to get your insurer “to partner up with you,” and to consider new cyber-security coverage – but “know its limitations.”

Tom also featured some of the fascinating data points that my co-presenter Arturo Perez Reyes provided on this burgeoning area of liability:

Co-presenter Arturo Perez Reyes said California alone has 81 separate privacy laws, and there are hundreds of laws outside the U.S. If you lose records, you will have to tell everyone that you lost them, he said, “essentially notifying a whole class of potential plaintiffs.”

There was a 44% increase in data losses last year that resulted in $50B in losses, Reyes reported, adding that nine million people were affected by identification theft.

“The concept of a firewall is a joke,” Reyes declared.

Tom also highlighted some back and forth between me and co-presenter Tim Delahunt:

Godes criticized insurance company arguments against coverage for data theft arising from failures on the part of the policyholder’s systems. “If there is no failure to maintain proper authentication and no failure of data security measures, there would be no potential liability and no lawsuits,” he said. “And if there never was a failure of proper authentication and never was a failure of data security, I suppose insurance companies would be thrilled because they would get your insurance premiums and nothing ever goes wrong.”Co-presenter Timothy Delahunt of Kenney, Shelton, Liptak & Nowak called this a “classic policyholder complaint – that insurance companies issue coverage then deny it.”

“The analogue is that courts will find coverage when they need to, to satisfy an underlying liability. Do I think the facts and policy language have changed?” Delahunt asked. “By and large no. Could the coverage landscape change as underlying liability expands? I believe that’s possible.”

For the rest of the analysis and the post, click here.  And thanks, of course, to Tom and HB Litigation Conferences for the write up!

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Disclaimer:

This blog is for informational purposes only. This may be considered attorney advertising in some states. The opinions on this blog do not necessarily reflect those of the author’s law firm and/or the author’s past and/or present clients. By reading it, no attorney-client relationship is formed. If you want legal advice, please retain an attorney licensed in your jurisdiction. The opinions expressed here belong only the individual contributor(s). © All rights reserved. 2009.

Corporate Insurance Blog featured in Blawg Review #224.

Thanks, Baby Barista and Times Online for featuring the Corporate Insurance Blog in Blawg Review #224.  In light of the recent issues with Twitter, Baby Barista wrote:

Finally, with Twitter down, if you start to worry about the consequences of cyber-attacks then Corporate Insurance Blog says it’s a good week to read about insurance coverage in that respect.

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If you’re getting here via Blawg Review, welcome!  And feel free to take a look at my writings on the fascinating issue of insurance coverage.

Disclaimer:

This blog is for informational purposes only. This may be considered attorney advertising in some states. The opinions on this blog do not necessarily reflect those of the author’s law firm and/or the author’s past and/or present clients. By reading it, no attorney-client relationship is formed. If you want legal advice, please retain an attorney licensed in your jurisdiction. The opinions expressed here belong only the individual contributor(s). © All rights reserved. 2009.

Total Cessation of Business Is Not Required for BI Coverage.

Advisen just published my article, Just How Much Business Disruption Is Required To Obtain Coverage Under Contingent Business Interruption Insurance Policies?.

In the piece, I explain that:

In insurance coverage cases relating to the application of contingent business interruption coverage, insurers consistently argue that there must have been a “total cessation” of operations, no matter the applicable policy language. They further argue that if there was no “total cessation” of business operations, the insurers are not obligated to provide contingent business interruption coverage. Those arguments, however, should not carry the day.

What is contingent business interruption insurance coverage?

“Regular business-interruption insurance replaces profits lost as a result of physical damage to the insured’s plant or other equipment; contingent business-interruption coverage goes further, protecting the insured against the consequences of suppliers’ problems.” Archer Daniels Midland Co. v. Hartford Fire Ins. Co., 243 F.3d 369, 371 (7th Cir. 2001) (“Archer v. Hartford”). In short, if a third party suffers a business interruption that affects the policyholder, such as “damage to [a third party’s] plant, which was neither owned nor operated by” the insured, “contingent business interruption insurance applie[s] to the losses suffered by” the named insured. CII Carbon, L.L.C. v. Nat’l Union Fire Ins. Co., 918 So.2d 1060, 1068 (La. App. 4 Cir. 2005).

The article discusses what sort of interruption is required under contingent business interruption policies. I argue that:

The plain language of policies that require only an “interruption of business” does not, by the terms, require a total “cessation” or “suspension” of business.

For the complete analysis, click here to read the complete article.

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Disclaimer:

This blog is for informational purposes only. This may be considered attorney advertising in some states. The opinions on this blog do not necessarily reflect those of the author’s law firm and/or the author’s past and/or present clients. By reading it, no attorney-client relationship is formed. If you want legal advice, please retain an attorney licensed in your jurisdiction. The opinions expressed here belong only the individual contributor(s). © All rights reserved. 2009.

Welcome, Steve Goldberg!

Steve Goldberg, a former colleague of mine at Dickstein Shapiro LLP, has joined the blogosphere.  Steve just started writing the Catastrophic Insurance Coverage Blog.  Surf on over to his blog and give his pieces a read.  Steve’s a sharp lawyer who is another terrific advocate for corporate policyholders.

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Disclaimer:

This blog is for informational purposes only. This may be considered attorney advertising in some states. The opinions on this blog do not necessarily reflect those of the author’s law firm and/or the author’s past and/or present clients. By reading it, no attorney-client relationship is formed. If you want legal advice, please retain an attorney licensed in your jurisdiction. The opinions expressed here belong only the individual contributor(s). © All rights reserved. 2009.