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Cybersecurity Insurance Coverage: Prudent Risk Management for Companies of All Sizes
The Connecticut Supreme Court recently published the much anticipated decision in Recall Total Info. Mgmt., Inc. v. Fed. Ins. Co. (“Recall III“), 317 Conn. 46 (2015), addressing commercial general liability (“CGL”) coverage for data breach. However, those waiting for expanded guidance from the supreme court with respect to coverage for cyber law and/or cyber exposures were most likely disappointed. The Connecticut Supreme Court fully adopted the appellate court's ground-breaking decision that there is no coverage for a data breach claim involving the theft of tapes containing electronically stored personal information under a CGL policy's “personal injury” coverage provisions because, even though there was evidence the tapes fell into the hands of an unknown third party, there was an absence of evidence that the files were accessed by any third parties.
Background
The facts are relatively straightforward, yet unique when compared with other cases where a data breach occurs as a result of hacking, encryption or pirating. See Recall Total Info. Mgmt., Inc. v. Fed. Ins. Co. (“Recall I“), 2012 Conn. Super. LEXIS 227 (Jan. 17, 2012) (both the Connecticut Appellate and Connecticut Supreme Courts adopted their facts from the Connecticut Superior Court's decision, which are set forth in summary below). In this instance, plaintiff Recall Total (“Recall”) entered into a contract with IBM to transport and store tapes containing electronically stored personal information of 500,000 current and past IBM employees. Recall, in turn, subcontracted with another company, Executive Logistics Services, LLC (“Ex Log”) (and together with Recall, “Plaintiffs”), to provide transportation services for the tapes. These tapes were not encrypted, but “[were] not the type that [could] be read by personal computer.” Recall I, 2012 Conn. Super. LEXIS, at *24. Pursuant to the contract, Ex Log maintained a $2 million CGL policy, a $1 million automobile liability policy, a $2 million fidelity bond/commercial crime policy, a $2 million professional liability policy, and a $5 million umbrella/excess liability policy, all naming Recall as an additional insured. Specifically, Federal Ins. Co. issued the CGL policy and Scottsdale Ins. Co. issued the commercial liability umbrella policy.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?