Insurer's Broad Interpretation Of Data Breach Exclusion Rejected By Court

Article by Darren S. Teshima and Harry J. Moren.

Non-cyber insurance policies often contain exclusions to limit or preclude coverage for data breaches. A Maryland federal district court recently addressed the scope of such exclusions.  The court analyzed the meaning of "data" in data breach policy exclusions in a multimedia liability policy and concluded that the undefined term "data" did not include satellite television programming. Having found that the exclusions did not apply, the court held that the underlying lawsuit involving allegations of unauthorized access to satellite television programming triggered the insurer's duty to defend the policyholder. At Orrick's Policyholder Insider blog,  Darren Teshima and Harry Moren discuss this decision's rejection of an insurer's attempt to avoid coverage by broadening the scope of these data breach exclusions.