Just as cyber threats are continually evolving, so are cyber liability insurance policies. With data breaches a common occurrence, many companies are focusing on their IT systems, but tend to overlook the insurance aspects. When preparing for and responding to a cyber event, having comprehensive insurance coverage is critical. Personnel responsible for detecting, reporting and responding to cyber events and privacy violations should also have a thorough understanding of the coverages provided under their cyber policies and how those policies are triggered, well before an incident occurs.
The Evolution Begins
In the past, companies and businesses have sought coverage under traditional types of policies, such as property or commercial general liability (CGL) policies. However, there has been extensive litigation over when and in what circumstances a CGL policy covers a data breach claim. Beginning in 2001, CGL policies began excluding “electronic data” from coverage, and in 2014 additional exclusions emerged in CGL policies that were designed to eliminate coverage for cyber-related damages.
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