By Maureen Veterano
Many businesses require access to client or customer confidential information in the normal course of providing goods and services- the food manufacturer needs the secret recipe to make the dessert; the computer consultant needs the customer list to produce the data base; the architects or engineers need the details of the project to prepare the bid. But what happens when that confidential information gets out and the finger may be pointing at you? Do you have a plan for what to do if you are accused of failing to safeguard the information?
Some policy holders have turned to their business or commercial policies for coverage, only to be disappointed. Others have looked to their professional lines insurance, or even their errors and omissions coverage and found there is a gap.
The problem of business owners suffering financial losses due to trade secret misappropriation has gotten so much attention lately that even Congress is considering taking action. The Defend Trade Secrets Act of 2016 (DTSA) would create a federal cause of action and unify the hodge-podge of various state trade secret laws that currently exist. It has been supported by the National Association of Manufacturers as well as other industry groups.
While a federal civil remedy such as the DTSA would certainly help with this growing problem, it won’t solve the dilemma of who will be responsible for footing the bill for defending a lawsuit and paying any damages that may be awarded. Fortunately, IPISC can offer a solution through our Unauthorized Disclosure of Confidential Information Defense Cost and Damages Reimbursement Insurance Policy (or UDCI for short). Ask your insurance professional for an application today and get your plan in place.