After a year which saw multiple law firms end up in the headlines for data breaches, the American Bar Association expanded its insurance program Tuesday to offer cybersecurity coverage.
The new offering, ABA President Linda A. Klein said in a statement, comes at a time when “the number of cyber breaches increases everywhere and throughout all industries.”
Chubb Limited, the world’s largest publicly traded property and casualty insurer, will underwrite the policy.
A data breach at a law firm can be especially detrimental due to the sensitive and sometimes proprietary nature of some documents stored on the firm’s IT systems.
““The American Bar Association has been educating lawyers about cyber security and the risks to their clients and their practices for a number of years. ABA Insurance is a new program though, developed by the Association within the last year to provide members with access to affordable coverage from top-quality carriers,” ABA Deputy Executive Director James Dimos told CyberScoop. “We knew from its inception that providing our members with access to cyber liability coverage was important.”
A professional organization of legal professionals with more than 400,000 members, the ABA in 2013 called on the U.S. government to consider new laws and regulations to specifically protect law firms from the growing threat of digital espionage and cyber attacks.
The Manhattan U.S. attorney’s office unsealed indictments against three Chinese citizens who were engaged in a sophisticated insider trading scheme in December. The hackers had broken into three different law firms in Chicago.
These businesses regularly provided legal services to company executives involved in merger and acquisition activities. By accessing this private information, the hackers were able to earn more than $4 million in illegal profits by buying shares of at least five publicly traded companies just before acquisition announcement were made.
In perhaps the most famous incident, Panama-based law firm Mossack Fonseca experienced a massive data breach in April causing millions of internal documents to leak online. Material that came out from the breach, which was later covered in great detail by the International Consortium of Investigative Journalists, became known as the Panama Papers.
Mossack Fonseca was reportedly relying on front-end computer systems that were “outdated and riddled with security flaws,” according to Wired. The high-profile breach exposed secretive documents, detailing the financials dealings of several world leaders, including Russian President Vladimir Putin, who were depositing money into offshore bank accounts.