Most companies that sell technology-based products or services purchase Errors and Omissions (E&O) Insurance to indemnify them from liability caused by the failure of their products or services. When the vendor’s products or services require access to the clients’ confidential information – and especially personally identifiable information (PII) or protected health information (PHI) – the nature and extent of the vendor’s obligations can get more complicated.
The combination of traditional E&O exposures with rapidly evolving privacy/data security exposures has created new insurance coverage and claims-handling uncertainties. As a result, technology companies that handle, store or transmit their clients’ or customers’ sensitive data are increasingly getting squeezed when they buy E&O insurance policies. Read more…
Last week, one of the world’s leading insurers released a new policy designed to help insureds cope with threats to their company’s brand and reputation.
This new coverage will assist an organization in finding, bringing in, and funding outside experts when there is either a potential or actual public relations crisis .
Companies often look for this type of assistance to formulate a response to an adverse event that could have a lasting impact on the firm’s reputation. Such public relations crisis events can range from an executive scandal, a product recall, or even an environmental disaster. Read more…
There is often a trickle down effect when it comes to massive economic dislocation. The latest evidence for that statement is to be found in Florida as a major law firm there was virtually shut down from its formerly lucrative business of processing foreclosures according to reports in the Wall Street Journal. The accusations include the now familiar litany of charges against banks servicing home loans including the forging of signatures and undue pressure to process loan repayments in haste.
So, the economic dislocation caused by the failure of the market for mortgage-backed securities in the last few years first led to problems in investment banks, then commercial banks and now to those businesses that support such businesses.
Liability Insurance for law firms has been “soft” for the past few years but as with banks, insurance costs may rise if there is a great increase in litigation arising out of the mortgage crisis.
Earlier this week, the Wall Street Journal reported on a rash of new litigation filed in the U.S. District Court for the Central District of California against “cookies”, the ubiquitous markers of our electronic activity. The lawsuits claim that, despite earlier rulings that allow internet sites to place these small text files on users’ computers, that newer versions of this technology result in online tracking that violates privacy and data security standards. The lawsuits, which seek class action status, accuse companies of violations of the Computer Fraud and Abuse Act and similar laws. The suits name Cable News Network (CNN), Travel Channel and other large media organizations as defendants. Read more…
Everyone has experienced the software End User Licensing Agreement (EULA) when downloading something new. They go on for pages of very small print and are unintelligible even if they were not so long. We all simply click “Agree” and move on to hopefully nothing more painful. EULAs are mostly meant as a deterrent against undue litigation and patent infringement from users. However, a federal judge in Hawaii ruled that despite the use of a EULA, a suit could proceed against software maker, NCSoft, for harms allegedly incurred by a user while playing the “Lineage II” online game. In the past, these cases have been routinely dismissed in the earliest stages mostly due to EULA defenses. Read more…
Most companies that sell technology-based products or services purchase Errors and Omissions (E&O) Insurance to indemnify them from liability caused by the failure of their products or services. When the vendor’s products or services require access to the clients’ confidential information – and especially personally identifiable information (PII) or protected health information (PHI) – the nature and extent of the vendor’s obligations can get more complicated.
