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Deals & Dealmakers

Avoiding cyber liability in a tech-centric world

By Gerald H. Morganstern, Partner
Goetz Fitzpatrick LLP

If you have a key to your office you are probably a low-tech person.

Today, card access is prevalent (with newer photo IDs and fingerprint or iris scans coming or already in use in very secure buildings).

Your building may have access control established by the owner. If so, you can co-ordinate a secure entry to your leased space using the building access card customized to allow entry to your space.
The landlord will have to approve any other system and likely require you to use its security contractor.

Unlike a key that must be returned, the card can be disabled when an employee is discharged. This assures that employees who disappear or forget to leave a card cannot come back into the space.
Some protection may be warranted from those who actually have access to your premises.

Your server room, or other secure areas with confidential information, may need separate access codes or keys.

The lease should provide for limited access to the landlord, its visitors, agents or employees, usually by requiring reasonable advance notice for access during regular business hours and having these outside people accompanied by a tenant representative (except if an emergency requires access and no tenant representative is available).

If you have sensitive or confidential data on your servers, you probably back-up the info periodically.
In a new space, you may be able to install a supplemental air-conditioner with a back-up generator to prevent overheating of a computer room or server failure in the event of a power outage.
Be sure to negotiate whether or not this equipment and any cabling must be removed at the end of the lease term.

The last main point is to protect the information on PCs and servers in the unlikely event you default and lose possession of your premises, or if you somehow fail to remove all equipment at the expiration of the lease.

If you have financial or other confidential information you will want to make sure the landlord does not remove or sell this computer equipment or give it to others before being wiped clean.
Your lease should give you extra time to retrieve this equipment and require landlord to leave it in place or store it safely for a certain period.

Many leases have confidentiality provisions only relating to the lease terms. Your may wish to expand those provisions to include your confidential information acquired by the landlord or its agents intentionally or unintentionally.

Today, a cyber liability insurance policy is a necessity for all professionals and others with financial or confidential information and is probably advisable for all businesses.

This policy provides coverage for cyber attacks and unauthorized release of information required to be kept private or confidential. It also covers security failures causing deletion or alteration of data. It may cover cyber extortion and cyber defamation.

There are additional benefits that may include related expense reimbursement. This policy may cover not only electronic hacking or online activities but may also cover private data and communications in different formats including digital and paper.

A standard cyber liability policy however may not cover these business activities: social media, adult content, debt collection, or payment processing.

When you search for a cyber liability policy, see if having the above confidentiality protections reduces its cost.

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