Privacy and Health Disclosure Liability

Posted on September 22, 2016 by Marijana Dabic

Publicly held corporations must disclose information that may have a material effect on the company—and officer health is not among examples listed in the government’s definition of “material.”

As an officer or director at your organization, you have an obligation to disclose any information that might materially affect your company or affect investors’ decision to acquire or sell shares.

Personal privacy trumps disclosure obligations as long as you are able to continue performing your duties for the company—until you turn over your duties as a principal officer, you are not required to inform shareholders. However, shareholders will likely come to know of any health issues whether or not you disclose immediately.

Shareholder Litigation

There are two scenarios that could give rise to shareholder litigation should you choose to protect your privacy and not reveal that you are experiencing health issues. In both of these cases, stock price would have to drop dramatically to merit a shareholder lawsuit.

Shareholders could claim that the announcement of your illness came at the end of a period of misrepresentation and that the company had concealed information about your well-being for an extended period of time. In this case, plaintiffs would need to establish that the information was material.

In the event of your departure from the firm, shareholders could say more should have been disclosed prior to the leave, and that by not disclosing information, the stock price was artificially inflated.

In any case, if your company is highly dependent on you for proper functioning, if there is a doubt, the best practice is to disclose information about your health.

Your Right to Privacy

Disclosures are not necessarily required about officer health—and after all, it is difficult to decide at what point it is appropriate to disclose information. However, the issue is highly debated, and some believe that the potential harm an officer’s absence could cause the company constitutes a material effect.

Risk Transfer

Directors and officers (D&O) liability insurance will cover legal costs in the event of a shareholder claim. Both you and your business can benefit from a D&O policy. Since there is no such thing as a “standard” policy, an independent insurance broker is invaluable when purchasing D&O coverage.

Canada Ranks Poorly in Lost Revenue and Continuity After Ransomware Attacks

Posted on September 14, 2016 by Marijana Dabic

Ransomware is a type of malicious software that is specifically designed to block systems or files until a victim—typically a company or high-ranking professional—has paid a sum of money to regain access. These types of attacks can be costly, sometimes averaging up to $50,000.

According to the recent report, the State of Ransomware, by malware remediation company Malwarebytes, Canadian businesses were among those most likely to pay ransomware demands. Additionally, the report, which examined 5,400 IT staff across Canada, the United States, the United Kingdom and Germany, showed that Canadian businesses ranked among the highest for lost revenue and business interruption following an attack.

In total, around 75 per cent of Canadian businesses admitted that they would pay an attacker to regain access to key systems and functionality. Other interesting findings from the report included the following:

Ransomware can impact more than the original infected system or file. In the report, Canada ranked the highest for ransomware penetration, as close to half of attacks affected 26 per cent or more of a company’s extended network.
Executives and senior-level staff are typically the targets of ransomware schemes.
On average, ransomware attacks in Canada were twice as expensive as those in the United States.
Business applications were found to be the most common vulnerability to ransomware in Canada. While email attacks are common in other countries, Canada’s strict anti-spam laws could be contributing to the lower number of email attacks.
Despite Canada ranking poorly in terms of business interruption and overall cost as it relates to the impact of ransomware attacks, 51 per cent of surveyed businesses claimed they were confident in their ability to stop an attack.
Health care and financial services were found to be the most common industry targets for ransomware attacks.

Ransomware attacks are a serious concern—one that continues to impact Canadian businesses. In the past year alone, more than one-third of security attacks in Canada were ransomware-related. To protect themselves from this ongoing threat, organizations should consider having a risk assessment done to determine and remediate potentially vulnerabilities.

4 Things Companies Should Document to Improve IT Security and Disaster Response

Posted on September 7, 2016 by Marijana Dabic

An IT manager has the difficult task of overseeing people, processes and technology. And, if there isn’t a departmental emphasis on documenting pertinent information, overseeing a successful IT security program can be a difficult, sometimes impossible, task.

The following are a few items IT professionals should keep a record of in order to maintain efficient IT workflows:

Incident response plans. An incident response plan not only helps companies prepare for potentially crippling IT disasters, but it can also give clients, partners and customers reassurance that an organization is committed to IT security.
Key stakeholders. In the event of an emergency, it can sometimes be difficult to identify who is responsible for what. This can make responding to incidents difficult and confusing. To help ensure a quick response to incidents, identify who would be the decision-makers following a variety of scenarios.
Common risks. Documenting IT information and processes not only ensures business continuity in the event of an incident, but it can help IT professionals prevent threats altogether. Experts recommend that IT departments rank their top five greatest threats and detail possible actions that the department can take if and when a threat emerges.
Third-party providers. More and more IT departments are working with third-party providers, especially as data continues to move to the cloud. In the event of an incident, it is important that a company is equipped with a list of contacts if there is an issue with an off-site system.

As an added bonus to documenting key IT information and processes, other departments will be able to see how data security is handled at a high level. This not only reinforces the importance of IT infrastructure, but it can help promote company-wide buy-in as it relates to ongoing training and future security initiatives.

The Potential Dangers of App Permissions

Posted on August 31, 2016 by Marijana Dabic

The recent launch of Pokémon GO—a popular augmented reality game and mobile app that connects with a user’s Google account—has sparked a larger conversation about mobile app permissions and social media connectivity. This is largely due to the fact that, in an early version of the game, Pokémon GO had full access to a user’s Google accounts, unbeknownst to most users.

Similar mobile apps that link to social media platforms like Facebook, LinkedIn and Twitter are common, as they offer an easy way for users to register, post updates and connect with others. This permissions process is typically referred to as “oauth,” and essentially allows for easy third-party authorization through an open framework, either via the web or through mobile apps.

The problem is, however, that these types of app permissions have become commonplace to the point where users no longer consider what information they are sharing across various applications. Oftentimes, it’s not clear what kinds of information is gathered through “oauth”.

To compound the issue, in most cases, users are not given the option pick and choose what information they’d like to publish or share once two apps are connected. As such, in the event that an app is hacked, malicious parties could have full access to a slew of personal information.

To protect themselves, professionals recommend that users review their app permissions at least once a month. Instructions on how to do this for each social media application can be found here.

Pokémon Go Liability Issues

Posted on August 24, 2016 by Marijana Dabic

Pokémon Go is a free-to-play game for iOS and Android devices. Since its debut, the game has exploded in usage, surpassing Twitter as the most popular app in the app store.

At its core, Pokémon Go is a game that uses a smartphone’s GPS and gyroscope sensors to determine a player’s location. Based on that information, the game displays a random variety of fictional creatures called Pokémon through the phone’s camera. The game also marks popular and prominent locations, such as parks, memorials and other frequently visited areas, as places where players can compete with each other and collect free in-game items. These areas are called Pokéstops and generally attract large crowds of players throughout a given day.

In essence, the goal of the game is to walk to various locations and catch as many of the Pokémon as possible. And, while the game may seem harmless, it carries a number of inherent risks—risks that you should be aware of in order to protect yourself and others.

Car Accidents

Because Pokémon Go requires players to be fixated on their phone screens, there’s an increased risk of auto accidents if people play this game while driving. This is despite distracted driving being forbidden in most provinces.

In fact, just a week after the game launched, a driver playing Pokémon Go sent two Quebec City police officers to the hospital after crashing into a police cruiser. And, that’s just one example—accidents caused by Pokémon Go have been reported all across Canada.

Drivers aren’t the only ones at risk of injury either. Pedestrians and cyclists should be mindful of their surroundings, as inattentive motorists playing Pokémon Go can pose a serious threat.

If you own a business that employs drivers, staff should be reminded of your driving policies and to never use mobile devices when operating a motor vehicle. Keeping in mind the basic rules of the road can keep both drivers and pedestrians safe when it comes to Pokémon Go.

Theft

As previously stated, Pokémon Go marks prominent locations as Pokéstops. It is at these stops where a player can collect items for free, and, if a special item (a “lure module”) is employed, attract Pokémon more easily.

When this lure module is used, nearby players that have their app open are notified and are likely to be drawn to the Pokéstop. By exploiting this method, thieves can attract Pokémon Go players to secluded locations and potentially rob them.

Pokémon Go players should refrain from playing the game late at night or alone. Whenever possible, stay in well-lit and high-traffic areas.

Business and property owners should be on the lookout as well for suspicious individuals to help protect themselves. The popularity of Pokémon Go has led to more and more foot traffic in areas that previously may not have been as active. This, in turn, has increased the likelihood of an incident like vandalism or burglary.

It’s important to note whether or not Pokémon Go is popular around your property, as this could lead to further concerns regarding theft.

Injuries on Personal or Business Property

Because Pokémon Go requires users to concentrate on their phone screens, it’s possible that they could become distracted and hurt themselves while playing the game.

And, in the event that a Pokémon Go user is injured on your personal or business property, you could be held responsible. That’s where property insurance can help.

Property insurance generally includes something called occupiers’ liability, which will ensure that you are equipped with the proper protection if a Pokémon Go player hurts him- or herself on your property.

For added protection, property owners are encouraged to post warning signs that highlight nearby hazards. Additionally, designating areas on your property as Pokémon Go-safe can help players further avoid injury.

Trespassing

Through the nature of the game, Pokémon Go players are encouraged to explore their surroundings. However, this can lead to them unlawfully breaking into spaces, which is a problem for both players and property owners alike.

The Royal Canadian Mounted Police (RCMP) has warned Pokémon Go players that they will be apprehended if they are caught playing the game in private areas. Players could also face fines if they are found in violation of Section 177 of the Canadian Criminal Code, which states: “Everyone who, without lawful excuse, the proof of which lies on him, loiters or prowls at night on the property of another person near a dwelling-house situated on that property is guilty of an offence punishable on summary conviction.”

Niantic, the company behind Pokémon Go, is now accepting requests for the removal of Pokéstops, which could dissuade players from certain areas. But it may not be enough.

Utilizing no trespassing signage around areas you do not want Pokémon Go players to explore can be a good first line of defence against unwanted visitors. Contact your local authorities if you believe a person is trespassing on your property.

Mitigating the Risk

There are a variety of risks inherent with Pokémon Go and they can vary in severity depending on your situation. In general, keep in mind the following safety tips:

Secure your property. Mitigate potential dangers, like trespassing and theft, by utilizing signage and fencing. Keep your car, business and house locked at night and ensure that expensive items are out of view.
Remove safety hazards. Examine your premises, looking for any hazards that Pokémon Go players could injure themselves on. Focusing on areas of high traffic can also help identify common hazards.
Report issues. If you see an individual using Pokémon Go while he or she is driving or if you are concerned about player safety for any other reason, contact your local authorities. They can help address any issues and take action if necessary. This will help keep Pokémon Go users safe and can prevent issues from worsening.

Pokémon Go isn’t likely to decrease in popularity anytime soon, and it’s important for businesses, players and community residents to be aware of common liability risks associated with the app. Doing so can help prevent a catastrophe before it occurs.

Archives

Privacy and Health Disclosure Liability

Canada Ranks Poorly in Lost Revenue and Continuity After Ransomware Attacks

4 Things Companies Should Document to Improve IT Security and Disaster Response

The Potential Dangers of App Permissions

Pokémon Go Liability Issues

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