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Why Your Law Firm Needs Cyber Insurance

Law Firms
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Unfortunately, for far too many lawyers the thought of addressing their potential liabilities with insurance coverage ends once they’ve secured the necessary Errors & Omissions (E&O) Insurance to satisfy their licensing requirements. You might have thought to yourself “guilty as charged” as you read that first sentence. But the fact that you are reading this hopefully means that you are considering cyber insurance for your law firm. Read on.

Cyber Insurance for Law Firms may not be the Law in your Province… Yet 

While E&O insurance, or professional liability insurance, is the only policy lawyers are currently required to carry in order to practice in most provinces, the trend is likely towards mandatory cyber insurance for law firms Canada-wide as we’ve seen in Manitoba. The current law of the land may not require law firms to carry cyber insurance in all provinces, but the current law of the virtual landscape is akin to the law of the jungle. And that climate has escalated quickly with a sizable uptick in cyberattacks since the COVID-19 pandemic caused an overnight shift to virtual work. So don’t be surprised if regulatory bodies of all licensed professional service providers who have a duty to protect the public and confidentiality start drafting mandatory cyber insurance regulations.

Either way, you are still bound by PIPEDA and professional and territorial licensing bodies to safeguard client information.  See PIPEDA and Your Legal Practice for more information – including the duty to notify clients if their personal information was compromised in a breach. More on notifications below.

cyber insurance for law firms
Does your law firm need a Quote for Cyber Insurance? Click HERE to get a quote now!

“Am I Not Better Off Focusing on Security Instead of Cyber Insurance for my Law Firm?”

No, a cyber insurance policy for your law firm is no substitute for rigorous cybersecurity measures. But, in fact, the most sophisticated cybersecurity protocols don’t always offer protection either. On a daily basis, organizations big and small fall victim to cybercrime – the latest being the CRA, who suffered a hack exposing sensitive information of thousands of Canadians that are now facing further identity theft worries.

There is no silver bullet when it comes to cybersecurity. Network and device security measures alone are not enough. Just like having cyber insurance for your law firm isn’t enough by itself. Not when it comes to risk management and keeping your law firm in business. And as you’ve probably said to your own clients, it’s about risk management and mitigating your losses. Cyber insurance for your law firm won’t stop a breach, but it can help protect your liabilities and keep your losses to a minimum.

 

“But is Cyber Insurance for Law Firms Really Worth it?”

You may be saying to yourself that your small legal practice isn’t a target. In case you’re weighing the odds of getting breached against the cost of cyber insurance for your law firm, include these numbers in your calculations:

According to the latest data available from the Government of Canada, 1 in 5 Canadian businesses fell victim to cybercrime. 60% of them were small- and medium-sized businesses.    

And don’t forget to consider that law firms can be seen as desirable targets as the information they hold can be used in several different ways to profit a cybercriminal, including using the personal information found in client files for:

  • Fraud
  • Identity theft
  • Extortion of the law firm
  • Extortion of clients by the threat of leaking private or confidential information online and on social media

Not to mention social engineering attacks aimed at getting trust account information.

 

Finally Some Good News, Protections that Cyber Insurance for Law Firms Can Provide

So what protection can you get with cyber insurance for your law firm? The following are just a few of the highlights of a cyber insurance policy for law firms:

  • First-party coverage for your own losses including costs to repair and/or replace data, forensic investigation costs, revenue lost due to a cyber event and operating expenses while business operations are put on hold
  • Third-party coverage for costs incurred by others affected by a breach of your systems
  • Notification costs and credit monitoring for third parties whose information was compromised
  • Coverage for data that is under the care, control or protection of a third party
  • Ransom costs for hijacked systems

Contact us for more coverage benefits that can be included in cyber insurance policies for law firms.

Like You, ALIGNED Brokers are Advocates for our Clients

We represent your interests when brokering insurance products for your legal practice and use our risk management expertise to customize protections that make good business and financial sense for your firm. Click here for a free, no-obligation quote on cyber insurance for your law firm in minutes.

Related Matters: Cyber Liability Insurance, Small Business Cyber Liability Insurance

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