Third-party liability for damage and defense costs resulting from:*
Network security liability
– Unauthorized disclosure of private information (privacy liability)
– Destruction of digital assets
– Unintentional transmission of malicious code
– Unintentional participation in denial-of-service attack
Failure to promptly report unauthorized disclosure of private information
Failure to comply with statutory requirement that insured manage an identity-theft prevention program
(Note: Not all jurisdictions have statutory requirement.)
Electronic media liability
(Note: Defamation and infringement of intellectual property rights optional in some policies.)
Technology errors and omissions liability
*In some policies:
• Payment of defense costs reduces policy limit, or such costs are paid in addition to the policy limit.
• Selection of defense counsel is mutually agreed upon, or counsel is selected solely by the insurer.
• Insured can refuse to settle and be responsible for 30% to 50% of claim, or insured must settle if insurer chooses to settle.
First-party expenses for:
Notification of customers regarding breach
(Note: For costs incurred within one year of notice to insurer.)
Forensic study to determine scope and cause of breach
Hiring attorney to ensure compliance with notification-of-breach laws
Regulatory action
(Note: Fines and penalties considered a third-party liability in some policies.)
Crisis management to mitigate damage to reputation
(Note: Public relations and credit monitoring sublimit of $100,000 on one policy; limit usually agreed on.)
Business interruption and additional expenses
(Note: Optional in some policies; also known as Business Income [and Extra Expense].)
Electronic data protection/remediation
(Note: Optional in some policies; difficult to insure because of prohibitive cost.)
Cyber extortion
(Note: Various threats asserted: introduction of a virus, denial of service, and transfer of funds available on some policies.)
Cyber crime
(Note: Insured's financial institution transfers funds on a thief's instructions; available on some policies.)