Recent, large-scale data breaches at several well-known
companies underscore the substantial risk that businesses now face
with respect to cyber, data-security liability. In this year alone,
numerous companies – including retailers, financial
institutions, and health care providers – have experienced
well-publicized, costly data breaches. These data breaches are in
addition to the breach that Target disclosed in December 2013,
where as many as 40 million credit and debit card numbers were
stolen from point-of-sale terminals. Target itself estimates that
this data breach will cost the company in excess of $148
million.
As such high-profile data breaches have become more frequent and
more expensive to mitigate and resolve, the insurance industry has
sharpened its stance on certain issues of insurance policy
interpretation that have been developing in the courts over the
past decade. The industry's position is reflected in several
recent articles and white papers
