Although North Carolina lawyers are not required to have malpractice insurance, we strongly recommend that all of our private practice clients obtain coverage. Even if you have malpractice coverage, it does not necessarily mean that you are covered in the event you are the victim of a cyber security breach or related fraud. More and more liability insurers are carving out exclusions for any losses or injury related to “cyber liability.” Whether you lose access to your computer files (ransomware attacks), you experience a data breach exposing you or your firm to liability, or you fall victim to cyber-related financial fraud such as wire fraud scams, your regular malpractice coverage may not help.
So, we recommend contacting your insurance carrier or reviewing your policy very carefully. With developments in generative AI and deepfake technology, including voice recordings and video impersonations using AI, it is getting much more difficult to discover and protect against fraud. If your liability coverage does not include cyber fraud or cyber liability, consider a stand-alone cyber liability insurance policy. Small businesses, and especially lawyers, are targeted precisely because of their fiduciary relationships, access to confidential and highly sensitive information, and handling of potentially significant amounts of money. Be vigilant, but also, get the protection you need.
