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44 N. Ky. L. Rev. 29 (2017)
Trends for Potential Insurance Coverage for Losses Arising from a Data Breach

handle is hein.journals/nkenlr44 and id is 39 raw text is: 

                  ARISING FROM A DATA BREACH

                Nathan L. Colvin* and Timothy C. Dougherty

                             I. INTRODUCTION
    The  costs arising out of  data breaches-including   monetary  damages,
lawsuits, fines and  the like-are   increasing for victims-especially  large
companies.'  Consequently,  companies   have  increasingly sought  insurance
coverage for damages and  costs flowing from a breach, under both existing and
prospective policies. This article will discuss trends in the ability of companies to
obtain such  coverage under  existing policies, as well as the scope of such
coverage that companies should consider when purchasing a policy.
    More  specifically, this article will first discuss attempts by companies to
obtain coverage  for breaches  under  traditional insurance policies, such as
commercial   general liability policies. Second, this article will discuss the
insurance industry's response to such efforts, including the creation of special
cyber liability policies for data breach losses. And finally, this article will discuss
legal issues and potential areas of future dispute arising out of such specialty

    Initially, companies facing financial losses resulting from a data breach have
looked to their commercial general liability (CGL) policies for coverage. Like
homeowners insurance for a homeowner, CGL policies are held by most
companies  and  insure against general business risks, such as bodily injury or
property damage   on company   premises, damage  caused  as part of company
operations, or damage caused  by the company's  employees.  In the context of
data breaches, companies have  sought coverage for the tangible loss of use of
property or for personal and  advertising injury suffered by the company's
employees  or customers, both of which are types of coverage typically found in
CGL  policies. The results of these legal efforts have been mixed.

     * Mr. Colvin is a litigation associate at Vorys, Sater, Seymour and Pease LLP, where he has
counseled clients regarding insurance coverage both before and after a data breach.
    * Mr. Dougherty is a litigation associate at Vorys, Sater, Seymour and Pease LLP.
    1. See NETDLIGENCE, 2016 CYBER CLAIMS STUDY 5 (2016), https://netdiligence.com/wp-
content/uploads/2016/1 0/PO2 NetDiligence-2016-Cyber-Claims-Study-ONLINE.pdf (showing a
steady increase in cost per record compromised from 2011-2015 before a sharp increase in 2016).

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