Protecting Directors And Officers From Derivative Liability Arising From Data Breaches

With data breaches affecting companies across virtually every industry, cyber security has remained front page news. Lawsuits brought by aggrieved consumers and financial institutions against companies that have suffered data breaches are not uncommon. Increasingly, companies are also being subjected to shareholder derivative suits against directors and officers alleging breach of fiduciary duty relating to a data breach. As a result, corporate boards should expect closer scrutiny of their actions regarding cybersecurity and data breaches scrutinized. A proactive approach to risk management and insurance coverage may make the difference in minimizing exposure.

Recent Examples of Derivative Litigation