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The False Claims Act (FCA) and its application to the DIB has been front and center with the Aerojet Rocketdyne and CHS FCA cases. The U.S. Federal drive for cybersecurity legislation, regulatory enforcement of the DoD DFARS/ CMMC program, the DoJ civil cyber fraud initiative and SEC cybersecurity proposal create compliance challenges for U.S domestic and international public and private sector organisations.
I suspect that insurance coverage under FCA claims may have some way to go and at some cost. The role of directors of public firms and their cybersecurity reporting obligations may be tested in court when it comes to FCA claims. However while professional indemnity insurance has had a spread of cases and unlikely to cover FCA claims. Courts in the U.S. have found a potential to cover FCA claims under Directors and Officers insurance. (in Gallup, Inc. v. Greenwich Ins. Co., C.A. No. CV N14C-02-136FWW, 2015 WL 1201518, at *14 (Del. Super. Ct. Feb. 25, 2015))
FCA insurance claims bought under DoD DFARS and SEC proposals maybe the ones to watch. The DFARS and SEC proposals require Board declarations of cyber security compliance to be submitted to the DoD (SPRS) and SEC. In the case of the SEC, confirmation that the board is skilled and competent in the oversight and assurance of cyber.
Ted Dziekanowski
#cyberinsurance #cybersecurity #legal #compliance #riskmanagement #falseclaimsact
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