Cyber Insurance 101: Read This Before Selecting A Cyber Insurance Policy

Several recent, large-scale cyber events, including both data breaches and cyber attacks, demonstrate that companies, both large and small, must protect themselves against the risk of a cyber event. Cyber insurance policies can be an effective means of mitigating such risk, and with the average cost of responding to a data breach or cyber attack now in excess of $6 million, the decision to obtain such a policy is not necessarily a difficult one. But finding the right cyber insurance policy can pose a much more challenging task.

Although traditional CGL policies may, in limited circumstances, still provide coverage in the event of a data breach or cyber attack, relying on such policies to cover cyber liabilities has become increasingly risky and uncertain. In fact, many insurance companies now require the exclusion of cyber liabilities from CGL policies. Indeed, although the Fourth Circuit recently held, in Travelers Indemnity Co. v. Portal Healthcare Solutions, LLC,