Sometime ago I read an article describing Harvard University’s loss of 6,600 admission applications containing the names, social security numbers, e-mails and other personal information of applicants applying for Harvard in the fall of 2007.

The information was shared online through BitTorrent, a free, open source file-sharing application that distributes large software and media files. The article went on to note that the person responsible secured the information only to prove that a specific administrator at the university did not know how to secure a web-server.

The University admitted the problem, apologized and offered assistance to anyone whose information was mis-used or otherwise jeopardized.

We recently wrote cyber liability coverage for a large medical practice. To demonstrate the potential for a malicious attack on the doctor’s network, I downloaded a report from a database (WHID) which chronicled network hacking incidents occurring over the last three years. Without thinking, I sent it to the printer. One hundred and thirty-seven pages later, duplexed, with twenty-four cites per page, I had an overpowering illustration of why cyber liability coverage makes sense.

We had another client a few years ago who unknowingly published a web page with Grant Wood’s “American Gothic” as a primary insert under his heading “American-Made”. A month after publication, he was sued by 1) Grant Wood’s estate for un-authorized use of the painting’s copy-rite as well as another suit for the use of the slogan, “American-made” by a prominent manufacturer. After some skillful negotiation, this small businessman was let off the hook for a little over $11,000.

     Cyber Liability covers first and third party risks arising from intellectual property infringement, failure to safeguard customer information, unintentional transmission of computer viruses, website advertising and a host of other exposures encountered on or through the Internet.. Coverage is on an enterprise-wide basis. In addition, coverage is available world-wide, including the U.S.A/Canada.

     In many cases, coverage may  include infringement of copyright, title, slogan, trademark, trade secret (non US), trade name, trade dress service name or patent (including non—US). Un-authorized use of any advertising material, slogan or title of others in the advertising of the business of others may be included as well as unintentional acts of plagiarism or unauthorized use of a literary or artistic format, character or performance  which may be contained in your published material. These claims are often worked out in arbitration but nonetheless, the cost can be exceedingly high when the damages are prolonged and in the public domain. It is easy to publish on the internet but exceedingly difficult to retract. Make sure that your facts are correct and be especially careful to avoid critical commentary that might lead to your being sued by a competitor.

Another important risk is the failure to protect the right of privacy of others as we saw with the Harvard example. Making known to any person or organization material that violates a person’s right of privacy or a person’s or organization’s publicity right is standard in many contracts as is disparagement libel or slander of the business of others. In many cases, these infractions area result of malicious hacking of a network by outsiders, disgruntled employees or even un-trained operators. . Restoring a persons privacy can be a long and expensive process and Federal Law now makes the restoration mandatory with severe penalties for failure to comply.

Charles T. Barnes, President

For more information about New York cyber liability insurance, give Ten Eyck Group a call at 518-464-0059.

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