While most of society struggles to flatten the curve, treat the sick and restart the economy, regrettably, some bad actors have used the COVID-19 emergency as an opportunity to exploit vulnerabilities for personal gain. One of the key areas of increased exposure is cybersecurity. Companies should review their risk management and insurance arrangements now to ensure that they are properly protected in the event they become the target of cyber crime.

The rapid and unexpected onset of the coronavirus pandemic resulted in massive changes in the way we do business. The transition from secure office infrastructure to working from home on personal devices and home networks took place almost overnight, leaving gaps in data security. Add public anxiety over coronavirus health concerns and economic hardship, and it is difficult to imagine a more perfect storm of cyber risk.

Scammers have impersonated the U.S. Centers for Disease Control and Prevention, the World Health Organization and other health authorities. A Johns Hopkins coronavirus data map was used to divert users to malicious websites. Phishers are using coronavirus themes, such as governmental loan programs and fake charities, to trick users into turning over money and sensitive business information. Ransomware attacks are on the rise. And data thieves are targeting industries involved in COVID-19 medical and pharmaceutical research. Indeed, all businesses are at risk.

Insurance coverage for cyber events can be found in different types of insurance policies, including some traditional crime, general liability, and first-party property policies, as well as newer policies tailored to cyber risks. In recent years, the insurance market has begun offering broader coverage for key cyber risks such as social engineering, ransom, extortion, business interruption and data breaches. However, the coverage terms still vary considerably from one policy to another, which can mean the difference between payment of the claim or denial. Companies suffering cyber losses should also look to indemnity agreements and vendor contracts with their counterparties, and to additional insured status on policies issued to counterparties that may be liable for the breach.

Cyber policies are not one size fits all, as the cyber risks facing a particular policyholder can vary based on business sector, risk profile and other specific needs. Careful review and negotiation is therefore needed. Now is the time to review these insurance and contractual arrangements comprehensively to protect your company when it may be most vulnerable.

The bottom line is this: these are extraordinary times and you should not make any assumptions about your coverage. Details matter. Expertise matters. Let us know if we can help.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. We will continue to evaluate the CARES Act, related regulations and any subsequent legislation to provide our clients guidance in real time. Please visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

Photo of John Failla John Failla

John Edward Failla is a partner in the Insurance Recovery & Counseling Group. With more than twenty years of experience focusing on insurance recovery for business policyholders, John has the practical and legal experience to assist clients in managing business risks and solving…

John Edward Failla is a partner in the Insurance Recovery & Counseling Group. With more than twenty years of experience focusing on insurance recovery for business policyholders, John has the practical and legal experience to assist clients in managing business risks and solving business problems.

John has helped clients recover more than a billion dollars from their insurers through litigation, alternative dispute resolution or negotiation in some of the most significant insurance matters involving a wide range of issues.

Photo of Marc Eric Rosenthal Marc Eric Rosenthal

Marc E. Rosenthal is a partner in the Insurance Recovery & Counseling Group. He has significant experience as a litigator and corporate adviser who focuses on issues of insurance and reinsurance. Marc is listed in Chambers USA, in which he is described as…

Marc E. Rosenthal is a partner in the Insurance Recovery & Counseling Group. He has significant experience as a litigator and corporate adviser who focuses on issues of insurance and reinsurance. Marc is listed in Chambers USA, in which he is described as, “key to bringing closure to many important negotiated settlements. He is quick to understand the positions and to recommend innovative ways to achieve resolution, and he follows this up with prompt and effective agreement preparation.”

Marc represents clients in insurance coverage matters involving first party, third party, D&O, environmental, toxic tort, business interruption, advertising injury, general liability, and professional E&O coverage; reinsurance arbitration; commercial litigation; mediation; negotiation; coverage analysis; and claims counsel.

Photo of Seth Schafler Seth Schafler

Seth B. Schafler is a partner in the Insurance Recovery & Counseling Group. He has extensive experience representing policyholders in coverage negotiations and disputes with their insurance companies, and litigating coverage issues in federal and state courts across the country.

Seth’s experience covers…

Seth B. Schafler is a partner in the Insurance Recovery & Counseling Group. He has extensive experience representing policyholders in coverage negotiations and disputes with their insurance companies, and litigating coverage issues in federal and state courts across the country.

Seth’s experience covers a wide variety of insurance products including commercial general liability, directors and officers, professional liability, errors and omissions, fiduciary liability, property, business interruption, fidelity, marine and credit risk insurance, among others.

Photo of Nathan Lander Nathan Lander

Nathan Lander is a senior counsel in the Insurance Recovery & Counseling Group. He has more than a decade of experience in counseling business policyholders and representing them in coverage disputes with their insurance carriers. Nate’s extensive experience enables him to guide clients…

Nathan Lander is a senior counsel in the Insurance Recovery & Counseling Group. He has more than a decade of experience in counseling business policyholders and representing them in coverage disputes with their insurance carriers. Nate’s extensive experience enables him to guide clients through the lifetime of their insurance needs — from counseling them regarding obtaining insurance in the first instance to zealously representing them in recovering when a claim arises.

Nate’s insurance recovery practice is national in scope. He has represented policyholders in coverage litigations in more than a dozen states, and helped policyholders recover more than a billion dollars from their insurers.

Nate frequently advises clients on risk management issues, including structuring of insurance programs and the negotiation and drafting of policy language. He has advised hedge funds, private equity firms and other corporate clients with respect to their obtaining of directors and officers and errors and omissions coverage.

Photo of Elise Yablonski Elise Yablonski

Elise A. Yablonski is a versatile litigator with trial and appellate experience in a wide variety of legal contexts, including business torts, trade secrets and unfair competition, professional malpractice, insurance recovery and fiduciary litigation. Her recent pro bono experience includes litigation under the…

Elise A. Yablonski is a versatile litigator with trial and appellate experience in a wide variety of legal contexts, including business torts, trade secrets and unfair competition, professional malpractice, insurance recovery and fiduciary litigation. Her recent pro bono experience includes litigation under the Hague Convention on the civil aspects of international child abduction.

Elise authored Chapter 40, titled “Trial Preliminaries and the Opening Statement,” for the third and fourth editions of Robert L. Haig’s treatise entitled Commercial Litigation in New York State Courts.