SDV Insights

With the ever-increasing usage of technology in the construction and energy industries, risks to business operations have also increased. Property developers and construction contractors rely on electronic data and communications more than ever to streamline projects, ensure efficient and timely supply chain delivery, and facilitate immediate communications between parties.

Technology is the driving force behind industry and growth for all businesses, but its advantages come with risks. Downed computer systems and lost data can have significant financial impacts. Security breaches, viruses, and information theft by computer hackers also pose a serious problem. Thousands of cyberattacks occur in the US every day, and no business is immune from this threat.

On February 24, 2022, Russia invaded Ukraine, escalating the conflict between the two countries to unprecedented levels. Much of the West quickly responded to Russia's aggression by levying some of the most severe sanctions in history on Russia's government, companies, and wealthy citizens, including Vladimir Putin.

The European Union's ("EU") General Data Protection Regulation ("GDPR") has been in effect for just over a year, and the full extent of the data privacy law's global impact is just now being fully realized.

Earlier this month, SDV reported on a recent Second Circuit case where the court broadly interpreted the "direct loss" requirement to find coverage for a cyber fraud, email spoofing scam. Now, the Sixth Circuit Court of Appeals has issued a similar opinion in American Tooling Center, Inc. v. Travelers Casualty & Surety Company, finding coverage for a company that lost $834,000 to a similar scam. These recent decisions may indicate a trend in favor of policyholders on the "direct loss" issue.

On Friday, July 6, 2018, the United States Court of Appeals for the Second Circuit held that a fraudulent email that caused a company to transfer $4.8 Million to the fraudster was a "direct loss" and was, therefore, covered by the company's computer fraud insurance.

In a pro-policyholder decision, LAW360.com reported that a New York federal judge recently ruled that a thief's use of emails to trick employees of Medidata into wiring money overseas was a covered incident under the company's computer fraud policy, weakening insurers' arguments that such coverage is meant to apply only to hacking into policyholders' computers.

What happens when a senior vice president ignores a litigation hold and deletes tens of thousands of emails? A $3 million sanction.

On November 15, 2016, 1:00 - 2:30 PM ET, SDV Southeast Managing Partner Gregory Podolak will be participating in the American Bar Association webinar, "Assessing the Situation: How to Identify and Evaluate a Contractor's Cyber and Data Risks."

In an effort to encourage businesses to mitigate the risk of a data breach, House Republican Ed Perlmutter has introduced a bill offering a tax credit to businesses that purchase qualifying cyber insurance policies