With the ABA Selling Cyber Insurance, Is Now the Time to Buy?

The internet is a dangerous place and attorneys are increasingly being targeted by hackers seeking to hold important files for ransom or make a buck off insider information. As a result, more and more attorneys are turning to cyber insurance to help protect against the costs of an attack.

Even the ABA is jumping on the cyber insurance bandwagon. The Association announced this week that it will begin expanding its cyber insurance offerings to cover more lawyers and firms.

Cyber Insurance Basics

Generally, cyber insurance comes in two forms: third-party and first-party. Third-party coverage usually covers fines and penalties stemming from regulatory actions, while first-party insurance covers the expenses you may incur personally in defending and responding to an attack, things like credit monitoring, investigating, and the like. Many cyber insurance policies will cover liability for data breaches and costs associated with those breaches, such as the cost of restoring data.

Most insurers "offer a menu of coverages which can be selected depending upon an insured's specific needs," according to Chris Andrews, VP of professional liability at AIG. Some carriers can offer services to help firms protect against exposure as well, Andrews says. The ABA's insurance "includes cyber coverage for a firm's own expenses, such as network extortion, income loss and forensics, associated with a cyber-incident as well as for liability protection and defense costs," according to the Association, and can be "tailored to meet a law firm's unique needs".

But Do You Really Need It?

But, you may be wondering, doesn't your normal lawyer's professional liability insurance cover a lot of the risks associated with cyberattacks? Maybe, particularly if you're sued for a loss of a client's information. But there may be gaps in that insurance. LPL insurance likely won't cover the cost of restoring files, for example, if your system has been wiped out.

For that reason, many professionals are increasingly viewing cyber insurance as a virtual necessity.

If you're interested in cyber insurance, you should review your current LPL policy for any gaps first, then find a cyber insurance offering that can fill in what you're missing. Of course, you don't have to go with the ABA. Plenty of companies, along with state and local bar associations, offer cyber insurance plans. It's possible that your current LPL insurer does as well.

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Related Resources:

• Will Insurance Cover a Ransomware Attack Against Your Company? (FindLaw's In House)
• Does Your Firm Need Cyber Insurance? (FindLaw's Strategist)
• Do Solo Lawyers Need Malpractice Insurance? (FindLaw's Strategist)