Cyber Policies Remedy Shrinking CGL Media Claims
Media/Cyber policies offer a valuable element to manage risks that arise from attacks via technology and computers and cyber operations. Under Cyber/Media policies, business that experience cybercrime attacks can receive appropriate references to cyber experts, legal counsel, and computer forensic scientists. Cyber coverage is often sold in conjunction with Media coverage which provides valuable coverage beyond that in the shrinking Commercial General Liability (“CGL”) coverage respecting to Media claims. The lack of predictability as to what risks distinct cyber policy forms will address makes evaluating policyholder protections challenging and calls for the expertise of experienced coverage counsel in procuring appropriate cyber coverage. Currently, Media/Cyber policies cover:
Network security and data privacy
Loss resulting from network business interruption
Rebuilding damaged business reputation
Extortion occurring online
Most, Media/Cyber policies, typically, do not cover:
Property loss resulting from breach
Loss of potential (or future) profits or sales revenue
Upgrading software and security
Loss of intellectual property resulting from theft
Social engineering fraud caused by spoofing key actions within a business
For a more robust discussion of Cyber policy coverage, see our past blog Insurance Coverage for and IT Consultant's Role in Media/Cyber Policy Application (Oct. 14, 2021). Policyholder may be able to find coverage for ransomware claims under traditional commercial liability coverage. However, “property damage” and “property loss” do not encompass computer systems and data so policyholders will more often than not find themselves without coverage for ransomware. As Sony was denied coverage after experiencing a data breach by hackers accessing secure company information because Sony’s Coverage B under CGL policy does not extend to third-party acts (e.g. hackers). Zurich Am. Ins. Co. v Sony Corp of Am. et al, Case No. 651982/2011 (N.Y. Sup. Ct. February 21, 2014). For additional ways of securing coverage for similar situations, see our past blog Why Securing Broad Crime Coverage Is the Best Protection Against Cyber Threats (Feb. 3, 2022).