The Legal Concern for Executors and Cyber Security That No One Discusses

Most executors don’t think of themselves holding legal liability as a fiduciary, but this can become overwhelmingly apparent in the digital era.

Cyber security and its related risks present a large source for potential executors and their advisors to think about.

We recently heard of a large data storage facility operator that suffered physical damage to its server facility. The accident was serious enough that it also defeated redundancy protections; its clients lost their data as a result.

What is the Digital Risk to Executor's Legal Liability?

Despite being known as a “cloud,” most of us are aware that there is physical infrastructure behind these remote data management businesses. There is always risk to client data, if not from physical damage, then from security breaches by hackers.

Business leaders routinely identify cyber security as one of—if not the largest—enterprise risks that keeps them awake at night. The business of insuring cyber risk for businesses of all sizes is still in its infancy as underwriters try to come to terms with:

  • Definitions of cyber crime events
  • Digital insurance agreements
  • Exclusions and limitations that should apply to intrusions
  • Privacy Breaches and theft of information and/or money

For Which Cyber Security Issues Should Executors Account?

These are business risks that are not well understood by most people, and hard to fit within traditional risk management techniques. In evidence of this, we still see many small business operators—including legal professionals—that communicate with us using free email accounts which may lack important security protection for transmitting sensitive business information.

In this context, we think about individuals that act as estate executors. We fear that many may communicate sensitive information through non-secure email accounts and/or store important information on free cloud storage accounts hosted by a variety of vendors located at many points across the globe.

Many people do their banking and investment management over the internet and have potential vulnerability to an unauthorized intrusion that could compromise such accounts. One might expect that there is a heightened risk for an executor that is suddenly and unexpectedly in possession of the testator’s computer, which may have outdated or no security software installed, or  which may have password information stored somewhere on the machine.

What Are First Steps to Protect Against Legal Liability?

These questions come to mind:

  • What is the executor's legal liability for a security breach in his or her own or the testator's digital account that results in a loss of estate value?
  • Is it unreasonable to expect an executor, as a fiduciary, to take similar security precautions?
  • Is cyber security really any different than the expectation that an executor will protect physical assets in there estate home by changing the locks and controlling the keys?
We haven't seen any reports of estate litigation arising out of a cyber loss to date, but we expect it's only a matter of time - and no one wants their clients to be the first major case.
Use this Free Executor Guide to prepare and protect your client from potentially damaging cyber security breaches.

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as an Executor?

Executors can be held personally liable for actions they take in estate administration. Talk to one of our Estate Risk Professionals today for your free estate risk analysis.


Downloadable Resources

Want more information on planning, preparing and administering an estate? Download our easy to use reference guides and resources to help you along the way.


  • Executor Liability Insurance - Return the completed application to our office to find out if you are eligible for executor liability insurance.


  • Fiduciary Bonds - Have you been asked to provide a bond for the estate? Download the application and follow the directions to apply for a bond.


  • Free Executor Guide - If you have been asked to be an executor or are acting as an executor this guide will help you understand your responsibilities and help track your activities.


  • Free Will Preparation Guide - A step to step guide to the questions you will need to address when preparing your will.


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