By applying an early state statute instead of the U.S. Supreme Court’s decision regarding what constitutes actual malice, the 1^st Circuit U.S. Court of Appeals in Boston is allowing a libel lawsuit brought by a terminated employee against his employer to proceed. Since the content in question is an email that no one disputes is true, the ruling is creating a stir regarding the impact on the First Amendment.

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A breach of contract exclusion in the errors and omissions policy purchased by an insurance agent that held binding authority for a property insurer was applied recently to bar the agent from receiving any E&O coverage when it was sued for having, apparently negligently rather than purposefully, issued two property policies that were beyond the scope of its binding authority.

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As reported by the Washington Post, the latest survey from the Ponenom Institute pins down the average cost to a company for a security breach at $6.6 million for 2008 (up from $6.3 million in 2007 and nearly $5 million in 2006). The cost per lost record is estimated at $202. When we first started blogging this cost, states were still developing notification laws. At this point, the majority of states have passed some legislation for it. While there are insurance options to aid companies facing a security breach, the survey points out that customers, especially those in the financial and health industries, do lose trust and leave a company after a breach is reported.

Nude photos on a smartphone serve to illustrate another potential vulnerability in information security for companies.

A married couple sued McDonald’s Corp. after photos of the wife turned up on the internet. Phillip Sherman says he left his iPhone, which contained the photos, at a restaurant in Arkansas and that an employee of the restaurant promised to secure the phone until he returned. He and his wife, Tina Sherman, want to hold the franchisor responsible for distribution of the photos.

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William Cahow worked at American Special Risk Management Corporation (American).  He opened an account in the name of “Bill Cahow d/b/a American Special Risk Management” at Peoples Bank, and over the course of eight years  he improperly endorsed checks that belonged to American and deposited them into his own account.  His practice of taking his employer’s funds began to fall apart when one of American’s clients became suspicious about the endorsement on a check the client had issued. 

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As previously discussed, Target was sued by the National Federation of the Blind for allegedly failing to make the Target website accessible to the blind. The lawsuit was certified as a class action and was recently settled. The settlement requires Target to establish a fund in the amount of $6,000,000 for claimants as well as update its website to be accessible to the blind. Target previously claimed that there was not a law in place that could require it to make its website accessible to the blind.