When Illinois enacted the Biometric Information Privacy Act in 2008 (BIPA), the concept of “biometric privacy protection” was foreign to many observers. Yet less than 20 years later, consumers are familiar with the concept of biometric privacy and class action plaintiffs’ lawyers have spotted an opportunity. As many other states and cities have enacted (or are in the process of enacting) analogous biometric privacy laws, class actions are likely to increase. And like night follows day, insurers will look for ways to avoid their obligations to cover these claims.
Articles Posted in Technology
Ohio Appellate Court Ruling Is a Reminder that Cyber Coverage Can Be Found in Unexpected Places
As the number and severity of cyberattacks rise, the importance of insurance coverage to offset resultant loss becomes increasingly important. An opinion issued by the Ohio Court of Appeals is a happy reminder that there may be coverage for cyber-related loss even if you did not buy cyber-specific insurance and that policyholders should review their entire insurance portfolio when confronted by a cyber loss.
Covering the Highlight Reel: The Need for Insurance Options to Protect NFT Owners
Winning a championship ring is everything. Just ask the Los Angeles Dodgers, who won 11 National League West titles between their 1988 and 2020 World Series Championships and would likely have traded several of those division titles for more World Series championships. But, of course, not all rings are equal. Neither are sports collectibles.
Insurance Implications of Transitioning to a Remote Workforce
A couple months into the widespread shift to remote work for many employees on a temporary basis, an increasing number of companies are considering or already implementing a permanent shift to remote work for most or all of their employees. Unsurprisingly, this shift is rapidly occurring in the technology industry. For example, Twitter’s CEO announced this week that its employees will be allowed to work from home permanently. But it is also occurring across other industries, including the insurance industry. For example, Nationwide is planning to permanently exit its building space, other than four main campuses, before the end of the year and is moving its other employees to permanent remote-working status.
Cyber Coverage by any Other Name Can Smell as Sweet: Maryland Court Rules Traditional Property Policy Covers Loss of Data and Impaired Computer Equipment After Ransomware Attack.
Cyberattacks are an increasingly frequent and costly risk faced by almost every business today. While the availability and scope of cyber-specific insurance has developed exponentially over the past few years, it is important to remember that more traditional policies (such as general liability and first-party property insurance) can still be a source for coverage in connection with cyber incidents, as a recent court decision demonstrates.
Massive GDPR Fine Is a Wake-Up Call to Get Compliance and Cyber Insurance Squared Away
Have $57 million (or more) to spare? You’re going to need it if you run afoul of the EU’s General Data Protection Regulation (GDPR) without cyber insurance.
In late January 2019, the French data protection authority, CNIL, imposed a fine of €50 million—or roughly $57 million—on Google for violations of the GDPR. The fine is the largest imposed to date under the GDPR, since it came into effect in May 2018. The Google fine highlights a couple of things: the GDPR has teeth, and regulators in the EU won’t hesitate to enforce the regulation. Possibly more frightening to companies subject to the GDPR is that the fine was not imposed because of any data breach or disclosure of sensitive information but, rather, on account of Google’s ordinary data privacy practices.
Ohio Court Holds Stolen Cryptocurrency Constitutes Covered Property Under Homeowner’s Policy
A little over a month ago, a judge in Franklin County, Ohio, held that Bitcoin—a popular form of cryptocurrency—constitutes covered “property” under the terms of a traditional homeowner’s policy.
In Kimmelman v. Wayne Insurance Group, an insured, James Kimmelman, sought coverage from his personal insurer for a loss of $16,000 in Bitcoin that was purportedly stolen from Kimmelman’s online account. Kimmelman argued that the Bitcoin constituted covered property under his homeowner’s policy. The insurer argued that Kimmelman was only entitled to recover $200 under a policy sublimit for monetary losses.
Plugging the Patent Coverage Gap
Imagine that your company has finally released its new flagship product, which is slated to be the new lifeblood of the company. You’re elated when early sales far exceed expectations. But soon you are hit with a demand letter from a competitor alleging that the product infringes its patents, and threatening suit. Remembering that your company purchased comprehensive coverage under its commercial general liability (CGL) policy, you feel some initial relief—but soon your insurer tells you that the general policy does not provide patent coverage, or even expressly excludes such claims. Suddenly, you’re left wondering how your company will weather a costly patent lawsuit while continuing to roll out its new product.
Eleventh Circuit Rules There Is No Coverage under Crime Policy’s Computer Fraud Component
Remember the “good” ol’ days when the run-of-the-mill theft involved someone physically taking something tangible? That is so 20th century. Now, thieves and fraudsters are able to use computers and the internet to carry out much more complex schemes. The insurance industry has attempted to keep up with the technological evolution in the coverage it provides, but insurers have also used unclear policy language and the complexity and individualized nature of today’s fraudulent schemes to avoid covering the resulting losses. A slew of courts over the past few years have decided whether crime policies—particularly those with a computer fraud coverage component—cover complex, technology-related fraudulent schemes. The Eleventh Circuit recently joined the fray and ruled that computer fraud coverage did not apply to a policyholder’s $11 million loss.
Are Smart Contracts Smart Enough for the Insurance Industry?
Third-party intervention may now prove unnecessary when interpreting and enforcing contract provisions—at least this is what proponents of smart contracts believe. The overall goal, they argue, is to provide security unattainable through traditional contract law, and to reduce additional transaction costs that come with the traditional process. Will insurance policies become the laboratory to test their thesis?
First imagined by computer scientist Nick Szabo in 1996, smart contracts are computer protocols meant to facilitate a contract’s implementation and performance. They can carry out only the specific instructions given to them, and all transactions are traceable and irreversible. Regarding functionality, experts have likened smart contracts to a vending machine; contract terms are first coded and placed within the block of a blockchain (the same technology Bitcoin uses). Once the triggering event occurs, the contract is performed consistent with all designated terms. Continuing the analogy, the individual inserting money in the vending machine sets off a chain of events, unable to be undone or halted midway. (Granted, this last part isn’t like the traditional vending machines we know.) The machine keeps the money and dispenses the item. The contract has been fully performed.