Debate Continues As To Whether General Liability Policies Ought To Provide Coverage For Cyber Losses

While well over a dozen class actions have been commenced in Canada with respect to alleged third-party losses stemming from large-scale data breaches, to date there has been no Canadian jurisprudence considering issues of insurance coverage in the context of such breaches. 

Insurance coverage tailored specifically to damages arising in connection with data breaches and other cyber losses has been available in the Canadian market for a number of years. However, there remain questions as to whether coverage may also be available under other traditional forms of insurance, including general liability policies. 

Several cases have worked their way through the Courts of the United States, dealing with the issue of whether there may be coverage under a traditional liability policy for third party losses arising from a large-scale data breach. There are conflicting decisions on the issue. A recent decision by the Fourth Circuit has found that an insurer had a duty to