Will Your Cyber Insurance Respond When You Need It Most?

On May 7, Columbia Casualty Company, an insurance company, filed one of the first lawsuits by an insurer seeking to deny coverage for a privacy class action under a cyber insurance policy.  Why is this significant?  As the number of data breach events and costs have soared, specialty cyber insurance policies have become both ubiquitous and necessary.  And, generally, insurance companies have responded quickly to data breach claims under cyber insurance and other specialty risk policies (while aggressively fighting coverage of breach-related claims brought under general liability policies).  Common wisdom has been that as the cyber insurance market plateaus and claims become more prevalent and costly, insurers will begin to resist coverage and push back more aggressively on claims.  The Columbia Casualty Company lawsuit may be the mark of that changing tide.