Law Firms May Face More Pressure From Insurers After Public Accidental Disclosures – NU PropertyCasualty360 | CarTailz

If a driver causes a car accident, their car insurance rates are likely to increase, encouraging drivers to be careful behind the wheel. And in the legal arena, insurers could play a similar role in enforcing more prudent behavior. (Image credit: Maksim Kabakou/Adobe Stock)

With the recent back-to-back accidental disclosures in the Alex Jones trial and the January 6 riot investigation, it’s safe to assume clients weren’t too happy with their legal teams.

But how do insurers react when lawyers make mistakes when using technology?

The answer is probably pretty simple. If a driver causes a car accident, their car insurance rates are likely to increase, encouraging drivers to be careful behind the wheel. And in the legal arena, insurers could play a similar role in enforcing more prudent behavior.

While the way they do this may vary, it’s possible that some changes are in the pipeline for the broader legal market. Finally, flaws in high-profile cases could draw insurers’ attention, said Mary Mack, CEO and chief legal technologist for The Electronic Discovery Reference Model.

“At a certain point, these types of errors will lead to some degree of malpractice liability,” Mack noted. “And then the insurance companies that insure attorneys will want to know if an individual attorney has processes that are up to date to protect their client communications.”

Although many firms have professional indemnity insurance, Hinshaw & Culbertson’s partner Steve Puiszis, a member of the firm’s professional indemnity practice, noted that inadvertent disclosures are not always covered by those policies.

“You get professional indemnity insurance to protect against errors or omissions that occur in the provision of legal services,” Puiszis said. “Depending on the type of policy, exclusions for data breaches and possibly accidental disclosure of sensitive information may be included in the policy, depending on how that exclusion is written.”

Puiszis argued that this lack of coverage is another reason for lawyers to purchase cyber coverage.

“That’s another reason why attorneys need to consider cyber insurance as well, because if it doesn’t fit into the professional liability policy, it would fit into and be covered by your cyber policy,” he added.

Recently, however, many companies have decided to forgo cyber insurance altogether as coverage shrinks and premiums hit record highs.

In some cases, an insurer can actually play a big role in preventing these mistakes in the first place. Take mutual insurance companies for example.

“We’re a mutual, so it’s different. We have a uniform rating. So it’s not as if their firms’ rates are going to change,” said Mary Beth Robinson, senior vice president of loss prevention at Attorneys’ Liability Assurance Society. “Instead, we go in with education.”

Educating lawyers about technology and its risks can take many forms, from presentations to podcasts to what she calls “loss prevention minutes” short videos.

“For example, we produce publications. We have a prototype data security policy that we circulate that our members have access to that covers all sorts of things like accidental email transmission, handling of highly sensitive information and document creation [and] Cloud-based file sharing,” she said.

Robinson noted that the organization is certainly keeping abreast of what’s going on in the legal profession to see where the mistakes are occurring.

“We also work very closely with our claims colleagues who handle our members’ claims,” ​​she said. “That’s why we meet with them regularly, we work with them to understand where the errors come from, where we see problems, where we see complaints.”

But even with mutuals, companies must have proper procedures in place to be eligible for coverage.

“We will turn companies away if we believe they do not have adequate processes and policies and claim histories to join,” Robinson said. “So there is a process to be able to join and a minimum size.”

In recent years, technology literacy has received growing attention after the American Bar Association amended the Model Rules of Professional Conduct in 2012 to address technology literacy.

Still, few states have since offered resources to ensure their attorneys keep up with technology. Just earlier this year, for example, New York became the first state to add a requirement requiring attorneys to take legal training courses in cybersecurity, privacy and data protection.

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