Cyber And Data Security And Privacy Liability: The Problem Isn’t Going Away. Get Out In Front Of The Problem By Insuring Your Risks

On August 6, 2014, the New York Times – and other media outlets – reported that a Russian crime ring had amassed the largest known collection of stolen Internet data – a cache of at least 1.2 billion user name and password combinations, as well as more than 500 million email addresses. The sheer volume of this stolen information underscores the fact that staying ahead of hackers has become an increasingly losing battle. Despite the publicity and increasing urgency in addressing this concern, data security breaches are becoming more frequent, more severe, and more costly, and have increasingly greater consequences for the company and its management. For example, the New York Times report comes on the heels of Target's recent announcement that its losses related to its data breach during the 2013 holiday season were expected to top $148 million, resulting in a "hold" rating on its stock and lowering its earnings forecast.