As I discussed in a recent post, on July 20, 2015, the Seventh Circuit issued its opinion in the Neiman Marcus consumer data breach class action lawsuit. In its opinion (a copy of which can be found here), the appellate court ruled that the district court erred in concluding that the plaintiffs’ fear of future harm from the breach was insufficient to establish standing to pursue their claims. The court held that the impending injuries alleged were sufficient to support Article III standing.
In the following guest post, Micah Skidmore of the Haynes and Boone law firm takes a closer look at the decision and discusses some important insurance coverage issues that the court’s ruling about future injuries may present.
I would like to thank Micah for his willingness to publish his article on my site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Micah’s guest post.
The recent Neiman Marcus decision from the Seventh Circuit has lowered the bar for plaintiffs suing in the wake of a data breach. In addition to actual injury, future “impending” injuries substantiated by an “objective,” “substantial risk of harm” and actual costs incurred to prevent or mitigate “imminent” harm are sufficient to support Article III standing. While the Neiman Marcus decision may provide some clarity regarding standards of pleading and liability (at least for plaintiffs), for those defendants reliant on network security/privacy liability insurance to protect against data breach claims, the opinion prompts an urgent question: does my policy cover liability for future injuries and preventive measures?
Continue Reading Guest Post: Coverage for Future Injuries: Is Your Cyber Policy Up To The Neiman Marcus Challenge?