A couple weeks ago Mike Duffley filled you in on what exactly Cyber and Data Breach Liability Insurance is, and how it can protect you and your business. After reading through that post you may still have questioned whether your regular General Liability Insurance would already be covering a data breach or any other cyber crimes against your organization. General liability coverage protects you from the costs associated with injury and property damage, but often will not cover data-related risks. This is where cyber and data breach liability insurance comes into play. Take the recent case of Sony Playstation vs. Zurich...
A 2011 breach resulted in more than 50 class-action complaints being filed [in the U.S.] against Sony. Zurich denied Sony’s claim for defense and possible indemnification. The initial New York trial court ruling was that acts by third-party hackers do not constitute “oral or written publication in any manner of the material that violates a person’s right of privacy” in the Coverage B (personal and advertising injury coverage) under the CGL policy issued by Zurich, therefore the Commercial General Liability policy provided no reparation for the loss. The case was appealed by Sony and a settlement between Sony and Zurich was reached in May of this year. ¹
General Liability Insurance will not cover:
- Identity theft resulting from either a malicious or inadvertent security breach. Identity theft refers to the fraudulent use of such information as Social Security numbers, credit card numbers, drivers’ license numbers, birthdates, PIN codes, and employee identification numbers.
- Lawsuits alleging trademark or copyright infringement resulting, for example, from information posted or available for distribution from your website.
- Inadvertent disclosure of your or a third-party’s sensitive information by means of email, instant messaging, or other electronic means.
- Degradation of an organization’s digital assets due to computer viruses, worms, or other malware and malicious code.
- The costs of monitoring credit card records for persons affected by a security breach at your business.
- Theft or destruction of such valuable digital assets as intellectual property or customer lists.
- Damage to an organization’s reputation resulting from a cyber security breach.
- Interruption of your business due to a hacker crashing a network.
- Coverage of such losses and risks usually requires a specific policy for cyber risks.
… The above are all scenarios that cyber and data breach liability insurance policies are designed to cover.
For more information and insight on Cyber and Data Breach Liability Insurance, download our whitepaper — “Are You At Risk? Rising Threats to Data Security and the Truth About Cyber & Data Breach Liability Insurance.”