Home depot, Target and JP Morgan Chase have all been recent victims of cyber-attacks and some industry experts are warning law firms could be next.
Although Americans spent $251 billion on civil litigation in 2012, resulting in an average $80,000 payout to plaintiffs, many businesses still fail to understand the importance of proper E&O coverages.
Laura Zaroski, Vice President of Management, Professional and Cyber Liability for Socius Insurance, says where cyber security is concerned, law firms “aren’t prepared.”
“Law firms are obsessed with connectivity,” said Zaroski. “Everyone wants to be able to access everything quickly and easily but that also means there are many ways that someone can get into your system. I think law firms are probably the easiest ones to breach because they want such an open system.”
Although not quite to the level of medical liability, Connecticut State Insurance Law Center Executive Director Peter Kochenburger believes lawyers now face the same level of liability as real estate brokers or insurance agents in the post-recession period.
Their complacent attitude toward cyber risk provides the perfect avenue for hackers to exploit and, given the sensitivity of the information they possess, could pose serious problems for their business.
“Everything that [law firms] collect is private company information, financial information, and personal information. Everything they [lawyers] discover is riddled with private information,” stated Zaroski.
She continued, “I think most law firms haven’t really focused on that exposure and if there ever was a breach with their clients’ information. I think that people would be horrified by what little effort law firms put into their security.”
Acknowledging the fact that every company in America is talking about cyber security, agents and brokers should take this period of chaos as an opportunity to expand their books.
