About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

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: TRENDS FOR POTENTIAL INSURANCE COVERAGE FOR LOSSES 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 policies. II. EARLY ATTEMPTS TO OBTAIN COVERAGE THROUGH COMMERCIAL GENERAL LIABILITY INSURANCE 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).

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most