The ongoing court case between Razer, a gaming company, and CapGemini, a IT services company, was concluded recently. Razer was awarded a total of US$6.5million in damages by the High Court. Shipping information and order details of thousands of customers were leaked in a cyber security breach in Sep 2020.
The damages awarded largely came about from the potential loss of sales suffered by Razer due to the breach, valued at US$6.1million, which led to loss of confidence by customers of its products. Other compensations include money paid for forensic services, law firm services to deal with regulators, and to cybersecurity consultant for discovering the breach.
Ultimately, the whole saga came about because of an innocuous looking # that the employee of CapGemini included in the configuration of a file which led to the unauthenticated access of data from the Kibana application.
This case highlighted the potential repercussions from a cybersecurity breach to the reputation of the companies involved, on top of loss of potential sales and payments needed for forensic recovery services and law firms etc to mitigate the fallout from such a scenario. Having a cyber insurance coverage in place will come in handy in this case as it provides for the forensic recovery expenses, on top of other mitigation costs involved.
It also highlights the nature of provision services by a third party vendor to a company. In today’s climate, companies will not hesitate to sue vendors to seek back losses for lapses. This can be easily mitigated by having a professional indemnity (PI) insurance coverage in place, to protect companies in instances whereby they are sued for negligence etc. It’s also common practice nowadays for bigger companies to require their vendors to show proof of PI coverage before awarding them the contracts. Contact MAKinsure to assist with the setting up of such insurance coverage to protect your company from such potential scenarios, as well as to source for quotes for your PI insurance needs.