Principles of Risk Management and Insurance, 13th Edition

Cyber Liability Insurance

Although cyber liability is not a new risk (coverage has been available since around 2000), liability arising from some well-publicized data breaches (e.g., Target and Home Depot), combined with the ISO’s exclusion endorsement used with its liability forms, fueled the growth of the cyber liability insurance market.¹⁶ Cyber liability insurance covers damages arising from the failure of a data holder to protect private information from being accessed by an unauthorized party. Because the cyber insurance market is relatively new, there are no standard coverages available. Two coverage approaches are currently being used. Some insurers are offering stand-alone cyber liability insurance forms. A second approach is to purchase ...