Having homeowner’s insurance is a good idea, but don’t count on it to protect you if your clients’ data is stolen from your property. Stephen E Wieker and Liisa M. Thomas and Winston & Strawn LLP write:
The U.S. Court of Appeals for the Seventh recently ruled that Nationwide Insurance Co. has no duty to defend or indemnify an accountant who lost sensitive personal information from client files. According to the lawsuit, the accountant’s loss of the information stemmed from the theft of a CD containing confidential client information from the accountant’s personal car. The CD contained the social security numbers, names, and birth dates of over 30,000 beneficiaries of the accounting firm’s clients, the Central Laborers’ Pension Fund, Central Laborers’ Welfare Fund, and Central Laborers’ Annuity Fund. After the Funds sued the accounting firm to recoup $200,000 (the costs of credit monitoring and insurance), Nationwide sought a judgment from federal court to establish that it had no duty to defend the accounting firm under the “in care of” and “business” policy exclusions.
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