New Mandatory Exclusions In Standard CGL Policies Limit Coverage For Data Breaches

The insurance industry continues to respond to the growing threat of data breaches by directing businesses facing that risk towards new, risk-specific cyber insurance products, while attempting to restrict coverage for data breaches under standard insurance policies. Nevertheless, companies without cyber insurance have successfully obtained coverage for these risks under existing standard policies, including under the Personal and Advertising Injury Liability provision (often referred to as Coverage B) found in many commercial general liability ("CGL") policies. Obtaining coverage, however, may soon become more difficult.  Policyholders will begin to see a new endorsement in their CGL policies that is designed to avoid coverage for data breaches and other cyber liability.