Does Cyber Insurance Cover Privacy Lawsuits?
Sometimes—cyber insurance may cover defense and settlement of privacy lawsuits arising from a covered data or security incident, subject to policy definitions and limits.
A lawsuit still must meet the policy’s definitions and conditions. A complaint alleging privacy harm unrelated to a covered security or privacy event may fall outside the cyber form, and some claims may be addressed by other liability coverage.
Review the privacy and network-security insuring agreements, covered claimants, definition of wrongful act, defense provisions, consent-to-settle terms, and exclusions for known events or contractual liability. Confirm whether defense costs reduce the limit and whether regulatory proceedings have a separate sublimit. If customer or employee information is involved, compare the policy’s definition of protected information with the actual data your company collects.
