Author: Jonathan L. Schwartz

Cyber Attacks

Cyber Insurance: Enabler of Ransomware Events? Not Quite

Ransomware is once again front and center in the news with reports of a rash of attacks on public and private entities throughout the United States. Some suggest that the proliferation of cyber insurance is fanning the flames of cyberattacks, but there is scant evidence to support that conclusion. In fact, cyber insurance merely offers insureds options in how to respond to a ransomware event. A recent ProPublica article speculates that cyber insurance’s ability to assist insured’s operations to quickly recover from a ransomware event… Continue Reading
Class Action / Data Privacy

Biometric Class Action Against Facebook Greenlit by Ninth Circuit Court of Appeals

In an opinion article dated August 8, 2019, the Ninth Circuit Court affirmed the district court’s order certifying a class action of users who claim Facebook’s facial-recognition technology violates Illinois’s Biometric Information Privacy Act (BIPA). A copy of the Ninth Circuit’s opinion can be found here.  At issue is Facebook’s use of facial-recognition technology without first obtaining the consent of its users. The court agreed that the plaintiffs had sufficiently alleged a concrete and particularized harm sufficient to confer Article III standing. The court… Continue Reading
Cyber Attacks

What Is Modern Warfare? Ninth Circuit Rules War Exclusions Do Not Preclude Coverage for First Party Loss Caused by Hamas Rocket Attacks

On July 12, 2019, the Ninth Circuit Court of Appeals found two “war” exclusions inapplicable, under California law, to a loss caused by 2014 hostilities between Israel and Hamas. Universal Cable Productions, LLC v. Atlantic Specialty Insurance Co., No. 17-56672, 2019 WL 3049034 (July 12, 2019). In doing so, the court overturned the Central District of California’s award of summary judgment in favor of Atlantic Specialty Insurance Company. The parties’ dispute arose out of Atlantic’s refusal to indemnify Universal for costs associated with Universal’s… Continue Reading
Data Privacy / Legislation

Part 1: The California Consumer Privacy Act — What Insurers Need to Know

Assembly Bill No. 375, better known as the California Consumer Privacy Act (CCPA), is likely the most robust and sweeping privacy law in the United States. This is not surprising as California is notoriously at the forefront of passing privacy legislation, even though close to 20 other states are also taking steps to pass similar legislation. The CCPA, which becomes effective January 1, 2020, creates a number of consumer rights regarding the collection, storage, selling, and processing of personal information, as well as corresponding business… Continue Reading
Cybersecurity / Insurance

Everybody’s Buying Cyber… Why Aren’t You?

A recent market survey shows companies are getting the message that purchasing cyberinsurance is a corporate imperative today. According to a recent AM Best Market Segment Report, direct premiums written for U.S. cyberinsurance policies from 2015 to 2018 have doubled to $2 billion. Three million cyberinsurance policies were in force in 2018, an increase from 2.6 million in 2017. Admittedly, premium growth has slowed to 12.6 percent in 2018, although that may be due in part to the number of companies using captives for their… Continue Reading
Cybersecurity

Cryptocurrency Theft is on the Rise

According to a recent study, losses from theft, fraud, and misappropriation of cryptocurrency increased to $1.2 billion worldwide in the first quarter of 2019, which is already 70 percent of all such activity from 2018.  In fact, it was  reported that hackers used phishing, viruses, and other techniques to steal $41 million in cryptocurrency from Binance, one of the world’s largest cryptocurrency exchanges. This is on the heels of an announcement by Fidelity Investments that it will soon buy bitcoin and sell bitcoin for institutional… Continue Reading
Class Action / Lawsuit

As If 200 Class Action Lawsuits Weren’t Enough…

The Illinois Supreme Court finally made its long awaited ruling on standing to sue under the Illinois Biometric Information Privacy Act (BIPA), siding with the class action representative in Rosenbach v. Six Flags Entertainment Corp., 2019 IL 123186, and allowing persons having suffered no actual injury to maintain a cause of action under BIPA.  BIPA has already given rise to 200+ putative class action lawsuits against businesses nationwide, including those with any measureable operation in Illinois. Businesses have fought back, arguing that BIPA’s private… Continue Reading
Cybersecurity / Insurance

Advisen Cyber Risk Insights Conference

I, along with three of my partners in Goldberg Segalla’s Cybersecurity and Data Privacy Practice Group, recently attended the Advisen Cyber Risk Insights Conference in New York City and came away with some terrific nuggets.  They include the importance of “silent cyber” to reinsurers and regulators, the fragmentation of the cyberinsurance market and the difficulty in driving change even for industry leaders, and continuing perceptions about coverage for cyber-related losses under stand-alone cyberinsurance policies and traditional insurance policies. One of the best resources I picked… Continue Reading
Cybersecurity

Why Not Cyberinsurance?

A July 2018 Market Watch Survey by the Council of Insurance Agent & Brokers revealed that only 32 percent of respondents purchased some form of cyber coverage in the past six months. And, 70 percent of U.S. healthcare firms have elected against carrying cyberinsurance. Incredible, right? With reports that cyberattacks affect businesses of all types, sizes, geographies, and industries, no business should prepare to shoulder the entire load should it suffer a breach.This is especially so, as evidence mounts that hackers can cause property … Continue Reading
Insurance / Lawsuit

Sixth Circuit Uses Every Tool in the Box To Build Case for Coverage for Defrauded Policyholder

July 12, 2018, we reported on the Medidata decision handed down by the Second Circuit in which the court found coverage for a claim resulting from social engineering fraud. We suggested the ruling in Medidata lacks persuasive power due to its unusual factual circumstances and atypical policy language. The Sixth Circuit’s decision in American Tooling Center, Inc. v. Travelers Casualty & Surety Co. of America, No. 17-2014, 2018 WL 3404708 (6th Cir. July 13, 2018), will have more persuasive power, but due to… Continue Reading