An article posted by my colleagues Judy Selby and Zack Rosenberg in the BakerHostetler Class Action Lawsuit Defense Blog raises some important issues for any company that could find itself the target of a class action lawsuit. With the proliferation of data privacy and other consumer class actions, that’s just about any company these days. The article, titled Courts Are Liberally Construing Litigation Insurance Coverage for Class Action Defenses and So Should Defendants, addresses the important issue of liability insurance covering class action lawsuits.
I’m often surprised in speaking with in-house attorneys and risk management personnel that they are unaware of the extent to which their current insurance coverage might protect them if they were ever sued in a class action, and that they have not considered certain types of specialty lines insurance, such as cyber risk insurance, that might protect them from potentially catastrophic liability and defense costs arising out of a class action. This is an especially important consideration for companies in industries that aren’t frequently targeted in class actions, because those companies may not think about the benefits of insurance protection until it’s too late.