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.