If You Still Haven’t Purchased Cyber Insurance…

If You Still Haven’t Purchased Cyber Insurance…

November 12, 2018 Business Insurance and Risk Management, The Beacon Blog 0 Comments

A recent post by Carlton Fields (https://www.jdsupra.com/legalnews/failure-to-procure-cyber-insurance-30412/) states “… companies of all sizes – any company that uses, collects, stores or handles confidential or personal information such as credit card numbers, social security numbers, etc. – MUST address exposures to hacking and other data breach events before they occur” (emphasis in original). As of 2017, only about 50% of companies had purchased Cyber insurance. Fields cites a recent Florida decision (St. Paul  Fire & Marine Insurance Co. v. Rosen Millenium, Inc.) confirming that  current Commercial General Liability policies do not cover cyber breaches.

If you have a standard CGL policy, most likely there is an endorsement CG 21 06 “Exclusion – Access or Disclosure of Confidential or Personal Information”. A non-standard policy will probably have a similar exclusion. In plain English, if you don’t have Cyber insurance you’re not covered for a data breach.

Warning – If you’re buying Cyber insurance for the first time, you may not be covered for incidents that occurred prior to the effective date. if possible, any “prior acts” exclusion should be restricted to known acts or circumstances.

At Beacon Insurance, analysis of cyber risk is part of our due diligence. If you’re not fully covered we will do our best to find the best policy for your needs.

About the Author

Harry Cylinder

Harry Cylinder, CPCU, ARM has spent nearly fifty years in the insurance industry, the majority of the time as a consultant. He has been employed by The Beacon Group of Companies since 2008, specializing in the review and analysis of property and casualty coverage forms. Mr. Cylinder has been reviewing policy forms as they have evolved over the past decades. In 2008 he published an article in the CPCU Journal which was the first description of cyber insurance coverage for a general insurance audience. Since that time he has regularly written on cyber and other topics for The Beacon Companies’ blog.