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DLA Piper's Hack Attack Could Cost 'Millions'

By James Booth
August 02, 2017

At press time, DLA Piper was still recovering from its massive cyberattack, with insurance brokers claiming that the resulting upheaval could lead to costs “in the millions” for the firm.

DLA Piper officially notified the UK's Solicitors Regulation Authority of the cyberattack, as well as other international regulators, and the firm was working with law enforcement authorities like the FBI and UK's National Crime Agency to support their investigations into the matter.

The firm said that it had also called in IT experts to restore its systems and safeguard client data.

“We are working with leading external engineers and information security specialists, in addition to those within our organization,” a DLA Piper spokesperson said, noting that the firm “has in place a range of different insurances relevant to this incident.”

Lawyers and brokers state that appropriate insurance would cover many of the costs associated with this kind of attack, including paying for external support, potential loss of income and the costs of getting lawyers back online.

“The total direct and indirect cost could be in the millions,” said Brett Warburton Smith, a partner at independent insurance broker Lockton Solicitors, which acts for 27 of the top 100 law firms in the UK. Philip Tansley, a legal director with the UK's Reynolds Porter Chamberlain, which advises companies and law firms on responding to cyber breaches, noted that he counsels clients to make sure they have the right coverage.

“Coverage available in the market includes mitigation expenses, which might cover, for example, the additional costs of working, such as getting people set up working remotely, and outsourcing urgent work to third-party firms,” Tansley said. “In terms of loss and deferral of revenue, that is a complex area. Firms should be careful that they have the right coverage and if they are not sure, discuss it with their brokers and underwriters and ask them 'if this happened, would you cover it and how would you calculate our claim?'”

The size of policies on the market stretch up to $500 million, added Sarah Stephens, head of cyber at insurance broker Jardine Lloyd Thompson Group plc.

“You could potentially buy anywhere from [$300 million to $500 million], but generally if you are only buying it to augment the third-party liability coverage in your professional indemnity policy, you are looking at the likely loss from business interruption so we would typically see policies of no more than $100 million,” she said.

*****
James Booth is a reporter with Legal Week in London. Contact him at [email protected]. Copyright The American Lawyer. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

At press time, DLA Piper was still recovering from its massive cyberattack, with insurance brokers claiming that the resulting upheaval could lead to costs “in the millions” for the firm.

DLA Piper officially notified the UK's Solicitors Regulation Authority of the cyberattack, as well as other international regulators, and the firm was working with law enforcement authorities like the FBI and UK's National Crime Agency to support their investigations into the matter.

The firm said that it had also called in IT experts to restore its systems and safeguard client data.

“We are working with leading external engineers and information security specialists, in addition to those within our organization,” a DLA Piper spokesperson said, noting that the firm “has in place a range of different insurances relevant to this incident.”

Lawyers and brokers state that appropriate insurance would cover many of the costs associated with this kind of attack, including paying for external support, potential loss of income and the costs of getting lawyers back online.

“The total direct and indirect cost could be in the millions,” said Brett Warburton Smith, a partner at independent insurance broker Lockton Solicitors, which acts for 27 of the top 100 law firms in the UK. Philip Tansley, a legal director with the UK's Reynolds Porter Chamberlain, which advises companies and law firms on responding to cyber breaches, noted that he counsels clients to make sure they have the right coverage.

“Coverage available in the market includes mitigation expenses, which might cover, for example, the additional costs of working, such as getting people set up working remotely, and outsourcing urgent work to third-party firms,” Tansley said. “In terms of loss and deferral of revenue, that is a complex area. Firms should be careful that they have the right coverage and if they are not sure, discuss it with their brokers and underwriters and ask them 'if this happened, would you cover it and how would you calculate our claim?'”

The size of policies on the market stretch up to $500 million, added Sarah Stephens, head of cyber at insurance broker Jardine Lloyd Thompson Group plc.

“You could potentially buy anywhere from [$300 million to $500 million], but generally if you are only buying it to augment the third-party liability coverage in your professional indemnity policy, you are looking at the likely loss from business interruption so we would typically see policies of no more than $100 million,” she said.

*****
James Booth is a reporter with Legal Week in London. Contact him at [email protected]. Copyright The American Lawyer. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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