For senior management, directors and officers (D&O) insurance understandably has an importance like no other policy in the company’s portfolio. Given the staggering number of data security breaches revealed in recent months, that self-protective instinct must also include ensuring that management is covered against cyberthreats. No company is immune-even computer security firms and government agencies working on top secret projects have been hit.
The SEC has stepped up to mandate that related disclosures must be made in securities filings. Now, every company under the watchful eye of the agency must disclose its analysis of exposure to a data breach or attack, discussion of material cyber-incidents, description of related legal proceedings and the implications for the firm’s financials.
This article also appeared in The National Law Review (December 19, 2011).