Cyber Liability Claim Examples

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Cyber Liability Claim Examples

Claim Examples

Data Breach Coverage

SITUATION: Alice owns a restaurant whose POS machines had been illegally skimmed with a small, hidden electronic device for eight months, affecting nearly 1000 cards. Over those eight months, some cardholders became identity thefts victims, and paid for their own credit monitoring; others had debit skimmed and were not able to recover stolen funds from their bank accounts because too much time had expired without them noticing the fraudulent activity.
ACTIONS TAKEN: Victims banded together and sued the store for costs incurred, including paying for credit monitoring, recovering lost funds and expenses incurred in clearing their identity.

Security Breach Liability

ACTION TAKEN AGAINST BUSINESS OWNER: Mary’s real estate agency is sued by an e-commerce organization for its participation in a denial of service attack against the e-commerce firm. The e-commerce firm sued the agency, among others for lost revenue and costs to repair their server as a result of the neglect of standards of care by those unknowingly participating in the attack. Mary’s agency paid over $50,000 in defense and settled for $30,000 in loss.
SITUATION AND PROBLEM THAT CAUSED SECURITY BREACH: Mary’s agency had antivirus and firewall protection on its computers; however, the firm had not made updates to them in the past couple years. It turns out their computers became infected with malware, which, when activated, participated in an attack against the e-commerce firm’s servers, overloading them with requests and shutting down their system for a day.

More claim examples

Defense of Regulatory Proceedings

SITUATION: Josh owns an appliance sales organization. Josh makes the decision to store client names, addresses, phone numbers and spending habits to help cross-sell their other products. The organization does not have proper security in place to protect the information. A hacker gains access to the personal information and sells it on the Internet. The state where the merchant is located accuses them of privacy law violations and sets up hearings to decide if fines will be assessed.
FINE AND PENALTY: Josh expends $10,000 to defend the company and is ultimately fined $30,000

Payment Card Industry (PCI) Fines & Penalties

SITUATION: A small family restaurant in Utah was informed by their payment card-processing bank of a potential data breach of their POS system. A forensics investigation found they unintentionally stored credit card numbers. However, the payment card processor demanded indemnification for fines assessed by the credit card companies who alleged a data breach.
FINE AND PENALTY: The payment card processor withdrew $10,000 from the restaurant’s bank account and sued them for the balance of $80,000.

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